Inclusion of pre-packed and labelled foodgrain will damage small business: CAIT

Jamshedpur, July 4: There is a lot of anger and outrage among the food grains traders of the country on the recommendation of the GST Council for bringing all types of pre-packed and pre-labeled foodgrains and other items under the GST tax slab of 5% which will cause huge loss of business to foodgrain traders across the Country. This decision will empower big brands to capture the market at the cost of small manufacturers and traders. Special food items, cereals, etc., which were not branded till now, were exempted from GST. With this decision of the council, pre-packaged and pre-labeled retail packs including pre-packaged, pre-labeled curd, lassi and buttermilk will now attract GST tax and will cause huge damage to the business of food grains traders in more than 6500-grain markets across the country.

B.C.Bhartia, National President and Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT) in a press conference held in New Delhi today said that to protest against this decision of the GST Council, the traders delegation will meet Finance Ministers of all the states of the country and will handover a memorandum to them. Mr. Naresh Gupta, President, Delhi Grain Merchants Association and Pradeep Jindal, President of Dal Millers Association said that foodgrain trade associations all over the Country are in touch with each other and to speak out their displeasure state level conference of traders will be organised in all states in the current week and later a national conference of foodgrain dealers will be held at New Delhi within a fortnight which will be participated by trade leaders from all over the Country. We shall also seek audience with FM Smt Nirmala Sitharaman and CBIC Chief Vivek Johri.

National Secretary Suresh Sonthalia said that there  cannot be two opinion about increase in tax collection but instead of bringing the goods daily use under the tax net, it would be more appropriate to widen the tax net by bringing more and more people under GST the tax net should be widened which will increase substantially the revenue for both Central and State Government. 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 earlier in 2017. However, the then Finance Minister Shri Arun Jaitley was cautious to keep items of daily necessities out of the ambit of GST tax net. It was a clear intention of the Government not to make any increase in the prices of the daily use items as largely they are being used by the majority of the population. But what happened now? We don’t see any logic in bringing these items under the ambit of GST tax net?

Sonthalia questioned the rationale of keeping these items in the 5% tax bracket and said that all the big brand companies in the country are serving only 15% of the population comprising of upper class and upper middle class whereas small manufacturers and traders are serving 85$ of the country’s population . This decision of the Government will not only increase the burden of compliance and its cost to the traders but on the other hand,  the basic goods of necessity will also become expensive.

According to this decision, now if a grocery shopkeeper also sells food items packed with any mark for identification of his item only, then he will have to pay GST on that food item. After this decision, agricultural products with pre-packaged labels like paneer, buttermilk, packaged curd, wheat flour, other cereals, honey, papad, food grains, meat and fish (except frozen), puffed rice and jaggery etc. will also become costlier. These items are used by the common man of the country.