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GST Update notification: Rice, Wheat and others Won't Attract Tax When Sold Loose; check List

by Rishika Choudhury

Date & Time: Jul 21, 2022 5:00 PM

Read Time: 2 minute



GST Update notification: In the midst of a controversy over the imposition of a 5% GST on pre-packaged and pre-labeled items beginning July 18, finance minister Nirmala Sitharaman stated on July 19 that these items will not be subject to GST if sold loose. The items, which are mostly necessities such as rice, milk, and pulses, are currently subject to the Goods and Services Tax.

Sitharaman in a series of 14 tweets said that the decision to levy tax on pre-packed and pre-labelled items were taken by the GST Council as a whole and not one member. “The GST_Council has exempt from GST, all items specified below in the list, when sold loose, and not pre-packed or pre-labeled. They will not attract any GST. The decision is of the @GST_Council and no one member. The process of decision making is given below in 14 tweets," she said.

Modalities changed to curb misuse of provision

“Taking this into account, when GST was rolled out, a GST rate of 5 per cent 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," Sitharaman said. However, soon “rampant misuse of this provision" was observed by reputed manufacturers and brand owners and gradually GST revenue from these items fell significantly, said the finance minister.

“The Fitment Committee—consisting of officers from Rajasthan, West Bengal, Tamil Nadu, Bihar, Uttar Pradesh, Karnataka, Maharashtra, Haryana & Gujarat—had also examined this issue over SEVERAL meetings and made its recommendations for changing the modalities to curb misuse."

“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," Sitharaman said. “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."

It must also be noted that items specified below in the list, when sold loose, and not pre-packed or pre-labeled, will not attract any GST, the finance minister clarified.

List of Items that Will Not Attract GST When Sold Loose

- Pulses/ Daal
- Wheat
- Rye
- Oats
- Maize
- Rice
- Aata/ Flour
- Suji/ Rawa
- Besan
- Puffed Rice
- Curd/ Lassi

Also Read: GST: जीएसटी के 5 साल, बढ़ी सरकार की कमाई!

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