Put an end to conundrum prevailing in taxation of food items, says trade body
Agro Food Chamber of Commerce and Industry has urged the Centre to put an end to the conundrum prevailing in the taxation of food items of daily consumption.
Its president S. Rethinavelu strongly objected to treating wheat as an agricultural produce and rice as a manufactured produce for taxation. He said that a conundrum was prevailing in taxation of food items of daily consumption such as rice, wheat, pulses, dal, flour, maida, atta and rava (sooji) under GST.
The primary reason for this was that GST was not levied on the basis of food products, but on the basis of irrelevant matters such as whether the products bear a registered brand name, already packed or packed in the presence of the consumer, whether pre-packed and labelled as per the provisions of Legal Metrology (Packaged Commodities) Act and Rules.
Taxing products as per the provisions of a different enactment causes utter confusion and increases the compliance cost for the assessees. The long-pending demand of Agro Food Chamber and the general public is total exemption for all food items of daily consumption, he said and urged the Centre to accept the popular demand.
To make matters worse, the Ministry of Consumer Affairs, Food and Public Distribution has proposed to amend Rule 3 of the Legal Metrology (Packaged Commodities) Rules, 2011 for mandatory labelling of all pre-packaged commodities without any weight restrictions. Consequently, the tax exemption applicable now to all food items, including rice packed above 25 kg, would go and unintentionally be taxed under GST. The consuming public would be greatly affected, he said.
To avoid all these confusions, the Centre must totally exempt all food items of daily consumption, including cereals and pulses, from GST without any conditions, he said.
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