Decision on GST hike taken after all States’ consent: Nirmala Sitharaman

Food items sold loose not to attract GST, clarifies Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on July 19 clarified the GST Council has exempted from Goods and Service Tax (GST), all food items including wheat, pulses, rice, maize, when sold loose, and not pre-packed or pre-labelled.

“They will not attract any GST. The decision is of the @GST_Council and no one member,” she pointed out.

The Finance Minister explained the process of decision making on the GST rate changes for pre-packed and pre-labelled, unbranded food items in 14 tweets.

“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,” she noted.

Also read: Pay 5% GST on pre-packed, labelled food items, hospital rooms above ₹5,000 from Monday

She explained that this is not the first time such food articles are being taxed. States were collecting significant revenue from foodgrain in the pre-GST regime. Punjab alone collected more than ₹2,000 crore on food grain by way of purchase tax. Uttar Pradesh collected ₹700 crore, Ms. Sitharaman wrote.

“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.