GST on essential items after States sought levy, aimed to check evasion: Official

Union Finance Minister Nirmala Sitharaman on July 19 stated that States levied sales tax or VAT on foodgrains in the pre-GST regime and the present levy on cereals, pulses, flour, curd and lassi is an exercise to curb tax leakage

GST on pre-packaged goods/food packets was levied after some States gave feedback of losing revenues they previously earned from levy of VAT on food items, a top government official said.

The decision to levy the tax, which came into effect from July 18, is not that of the Union Government but of the GST Council. It was considered by the Fitment Committee that has officers of some States and the Centre.

It was also recommended by a group of ministers (GOM) consisting of minister representatives of some States and finally by the GST Council, Revenue Secretary Tarun Bajaj told PTI.

Also read: Explained | What is the controversy over GST levies on food? 

In all, the GST Council, the new constitutional mechanism in the country for taking decisions on GST, took a consensus view on levy of the tax, he said.

The panel, which is headed by the Union Finance Minister and comprises representatives of all States and Union Territories, takes decisions when everyone is onboard, he said.

However, pulses, wheat, rye, oats, maize, rice, flour, suji, besan, puffed rice and curd/lassi when sold loose and not pre-packed or pre-labelled will not attract any GST.