New Delhi, July 19 (UNI) Amid opposition parties slamming the government over GST levy on prepackaged and labelled food items, Finance Minister Nirmala Sitharaman on Tuesday said that all states including non-BJP states agreed with the decision in the GST Council meeting held late last month.
“This was a unanimous decision by the GST Council. All states were present in GST Council when this issue was presented by the Group of Ministers (GoM) on Rate Rationalisation in the 47th meeting held in Chandigarh on June 28, 2022,” Sitharaman said while taking to micro-blogging site Twitter.
“All States, including non-BJP States (Punjab, Chhattisgarh, Rajasthan, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, Kerala) agreed with the decision. This decision of the GST Council is yet again by consensus,” she further said.
The Finance Minister highlighted that the GoM which recommended these changes was composed of members from West Bengal, Rajasthan, Kerala, Uttar Pradesh, Goa and Bihar and was headed by the Chief Minister of Karnataka. She noted that the GoM carefully considered the tax proposal taking into account the tax leakage. The Minister said that the decision was a much-needed one to curb tax leakage. “It was considered at various levels including by officers, the Group of Ministers, and was finally recommended by the GST Council with the complete consensus of all members,” she said.
Putting out a series of tweets, Sitharaman said that the GST Council in its 47th meeting recommended to reconsider the approach for imposition of GST on specified food items like pulses, cereals, flour, etc. She stated that when GST was rolled out, a GST rate of 5% was made applicable on branded cereals, pulses, flour. Later this was amended to tax only such items which were sold under registered brand or brand on which enforceable right was not foregone by supplier.
“However, soon rampant misuse of this provision was observed by reputed manufacturers & brand owners and gradually GST revenue from these items fell significantly. This was RESENTED by suppliers and industry associations who were paying taxes on branded goods. They wrote to the Govt to impose GST uniformly on all packaged commodities to stop such misuse. This rampant evasion in tax was also observed by States,” she said.
She noted that various items such as wheat, pulses, oats, besan and rice when sold loose, and not pre-packed or pre-labeled, will not attract any GST.