GST on pre-packed labelled food items will hit common man: CAIT

 Traders to write to state finance ministers

Jamshedpur, July 7: Holding State Finance Ministers responsible for taking the decision to bring pre-packed & pre- labelled Foodgrain, Curd, butter milk etc under 5% tax slab which were so far were exempted under GST, at recent meeting of the GST Council, the retail trade across the Country is highly perturbed and terming the decision as one of the most unpopular decision of GST Council. This decision of GST Council is considered as anti- trader and anti-people and all State Finance Ministers are being held responsible for such an unpopular decision. The Foodgrain and other vertical of traders have started mobilising traders by organising State level meet of Foodgrain, pulses and Rice traders and are deciding to present a memorandum to their respective Finance Ministers urging them to withdraw the decision.

It is a matter of great regret that all the states unanimously passed it in the meeting of the GST Council. It seems that none of the Finance Ministers have thought about implication of this decision on small traders and more so on consumers as it will give rise to inflation in the prices. It is also a matter of regret that no trade association in the country was consulted in this regard by any of the state. The main contention of the disagreement is that only 15 percent of the population in the country uses branded goods while 85 percent of the population lives on products which are pre-packed or pre-labelled. Bringing these items in the tax slab of GST is an unjust move, which should be taken back by the GST council and the decision should not be notified as an immediate relief, said Praveen Khandelwal, National Secretary General and Secretary Suresh Sonthalia of the Confederation of All India Traders (CAIT).

CAIT said that the trading community is at par with the Governments on the need of increase in GST tax collection, but instead of bringing the goods of the common people in the tax slab, the tax net should be widened, for which those who have not come under the tax net so far, they should be brought under the ambit of GST which in turn will increase the revenue of the Central and State Governments. They said that there was never any tax on food grains since independence, but for the first time big branded food grains were brought under the tax net. They further said that the intention of the government has always been to keep the items of daily necessities out of tax net and keep their prices low. However, this decision is against the basic fundamentals of GST. Even in 2017, when GST was introduced, these items were kept out of tax net but what has happened now that these basic items of life have to be taxed!

 Both Khandelwal and Sonthalia said that marking and inscription of other related information on food products is mandatory under Food Safety & Standard Act and by virtue of this, the product can’t be treated as branded. Even if someone wants to sell any goods without a mark, he cannot sell it and as soon as the mark is applied, he comes under the purview of GST.