The Food Processing industry has urged the government to keep the rate of GST on essential food items at zero or lower level, to avoid an adverse impact on the agricultural sector and contain rise in food inflation.
The Confederation of Indian Industry (CII) has suggested classification of GST rate on food items in three baskets which includes basket for poor man, common man and the basket that attracts the standard GST rate.
Under this it has suggested keeping perishable fruits and vegetables, milk and dairy products besides packaged food priced at ₹10 in the poor man’s basket and putting it at zero GST level.
CII has suggested that daily food products including edible oil, convenience foods, food mixes, fruit juices, edible preparations, masalas and processed food sold at above ₹10 but less than ₹20 should be put in the basket of the common man and the lower GST rate should be levied.
Piruz Khambatta, Co-Chairman, National Committee on Food Processing Industries at CII, said, “Processing helps in saving wastage and it would motivate the industry, not to have the general rate but lower rate for essential food products. There should be parity in tax between processed and unprocessed food products otherwise the very benefit of processed food will not reach the customers.”