• 04 Jul 2022 05:09 PM
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5% GST on un-branded, pre-packed food items to hit small traders: CAIT

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The GST Council last week decided to bring packaged foods items like milk, curd, and dried leguminous vegetables, makhana, wheat or meslin flour, jaggery, puffed rice, organic food, manure and compost under the 5% tax slab

BENGALURU: Opposing the decision of the Goods and Services Tax (GST) Council to do away with the exemption on pre-packed and unbranded food items and impose a 5% tax, the Confederation of All India Traders (CAIT) said the move would hit small businesses across the country. The association will seek meetings with the Union finance minister and state finance ministers in the coming days and urge them to have a re-look at the decision that would "empower big brands… and increase compliance burden for small traders."

"The GST Council decision…will cause huge loss of business to foodgrain traders across the Country. It will empower big brands to capture the market at the cost of small manufacturers and traders… it will cause huge damage to the business of food grains traders in more than 6,500 grain markets across the country," it said in a release on Monday.

The GST Council last week decided to bring packaged foods items like milk, curd, and dried leguminous vegetables, makhana, wheat or meslin flour, jaggery, puffed rice, organic food, manure and compost under the 5% tax slab.

Praveen Khandelwal, general secretary, CAIT, said instead of bringing the goods of daily use under the tax net, it would be more appropriate to widen the tax net by bringing more and more people under the GST tax net.

"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… but then finance minister Arun Jaitley was cautious to keep items of daily necessities out of the ambit of GST tax net," Khandelwal pointed out.