New Delhi: Traders’ body CAIT said Monday that the decision to levy 5 percent GST on prepackaged and labeled foods will result in lost sales for food grain traders, increase the compliance burden and raise prices of unbranded daily necessities. The Confederation of All India Traders (CAIT) said it will call on Union Finance Minister Nirmala Sitharaman and the GST council to reconsider the decision. Prepackaged and labeled foods such as meat, fish, curd, paneer and honey will now attract GST.
This comes after the GST Council last week adopted most of the recommendations of a group of state ministers about withdrawing exemptions to rationalize the levy. CAIT Secretary General Praveen Khandelwal said that to protest against this decision of the GST council, the traders’ delegation will meet with state finance ministers and hand over a memorandum to them.
He said there is a lot of anger and outrage among the food grain merchants on the recommendation of the GST council to bring all types of prepackaged and pre-labeled food grains and other items under the GST tax bracket of 5 percent, which will lead to a huge loss of business for food grain merchants across the country. “This decision will allow big brands to conquer the market at the expense of small manufacturers and merchants. Special foods, cereals, etc., which were hitherto unbranded, were exempt from GST.
“With this council decision, pre-packaged and pre-labeled retail packaging, including pre-packaged, pre-labeled curd, lassi and buttermilk, will now attract GST taxes and wreak havoc on food grain merchants’ operations in more than 6,500 grain markets across the country,” said Khandelwal. Speaking at a press conference here, CAIT’s national president BC Bhartia said that this decision will not only increase the compliance burden and costs for the merchants, but on the other hand, the necessary basic goods will also become expensive.
“According to this decision, if a grocery retailer now also sells food items packaged with a mark just for identification of his item, then he must pay GST for that food item. After this decision, agricultural products with prepackaged labels such as paneer, buttermilk, packaged curd, wheat flour, other grains, honey, papad, food grains, meat and fish (except frozen), puffed rice and jaggery, etc. will also become more expensive,” said Bhartia.
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