No GST on food items when sold loose, clarifies FM

Following uproar in the Parliament over GST on food items, Union Finance Minister Nirmala Sitharaman on Tuesday defended the imposition of 5 per cent GST on food articles such as cereals, rice, flour and curd, which are pre-packaged and labelled, saying that it was a unanimous decision of the GST Council last month in which even non-BJP ruled states were present. The Finance Minister released a list of items that will not attract any GST, when sold loose, and not pre-packed or pre-labeled. In a series of tweets, she said: “Recently, 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. There have been a lot of misconceptions about this that have been spread. Here is a thread to lay the facts.” “Is this the first time such food articles are being taxed? No. States were collecting significant revenue from foodgrain in the pre-GST regime. Punjab alone collected more Rs 2,000 cr on food grain by way of purchase tax. UP collected Rs 700 cr,” she said. “Taking this into account, 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,” the FM said.