GST on puffed, flattened rice: Nirmala Sitharaman clears air

Bhubaneswar: Amid uproar across the country over imposition of GST over several essential food items, including puffed rice and flattened rice, Finance Minister Nirmala Sitharaman today issued a statement clearing misconception over the taxation.

The food items when sold loose and not pre-packed or pre-labeled will not attract any GST, she stated.

Below is the list of the food items.

“When GST was rolled out, a GST rate of 5% was made applicable on branded cereals, pulses and 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 and brand owners, and gradually GST revenue from these items fell significantly,” the minister said.

This was resented by suppliers and industry associations who were paying taxes on branded goods. They wrote to the Government to impose GST uniformly on all packaged commodities to stop such misuse. This rampant evasion in tax was also observed by States, said Sitharaman.

It is in this context that the GST Council in its 47th meeting took the decision. With effect from July 18, 2022, only the modalities of imposition of GST on these goods was changed with no change in coverage of GST except 2-3 items. It has been prescribed that GST on these goods shall apply when supplied in “pre-packaged and labelled” commodities attracting the provisions of Legal Metrology Act, she said.

“To conclude: this 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 added.

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