GST on pre-packed labelled food items to increase traders’ compliance burden, raise prices: CAIT

Traders’ body Confederation of All India Traders on Monday said that the decision to levy five per cent GST on pre-packed and labelled food items will cause loss of business to foodgrain traders, increase compliance burden and raise the prices of unbranded everyday essentials.

Traders’ body Confederation of All India Traders (CAIT) on Monday said that the decision to levy five per cent GST on pre-packed and labelled food items will cause loss of business to foodgrain traders, increase compliance burden and raise the prices of unbranded everyday essentials.

CAIT appealed to the Finance Minister Nirmala Sitharaman and the Goods and Service Tax council to reconsider the decision. “This decision will empower big brands to capture the market at the cost of small manufacturers and traders,” CAIT said.

Items that have been brought under the purview of GST are pre-packed and labelled food items like meat, fish, curd, paneer and honey. This comes after the GST Council last week accepted most of the recommendations of a group of ministers from states on withdrawing exemptions to rationalising the levy.

Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT) in a press conference held in New Delhi on Monday said that to protest against this decision of the GST Council, the traders' delegation will meet finance ministers of all the states of the country and will hand over a memorandum to them.

Khandelwal said there is a lot of anger and outrage among the foodgrain traders on the recommendation of the GST Council for bringing all types of pre-packed and pre-labelled foodgrains and other items under the GST tax slab of five per cent, which will cause a huge loss of business for foodgrain traders across the country.

CAIT’s National President BC Bhartia said this decision will not only increase the burden of compliance and cost to the traders, but on the other hand, the basic goods of necessity will also become expensive.

"According to this decision, now if a grocery shopkeeper also sells food items packed with any mark for identification of his item only, then he will have to pay GST on that food item. After this decision, agricultural products with pre-packaged labels like paneer, buttermilk, packaged curd, wheat flour, other cereals, honey, papad, food grains, meat and fish (except frozen), puffed rice and jaggery etc. will also become costlier. These items are used by the common man of the country,” Bhartia said.