The Agrofood Chamber of Commerce and Industry has requested the Tamil Nadu Chief Minister not to accept the proposal of the Central Government to include essential products such as rice under GST as the measure will cause hardships to the general public.

The Centre, on the recommendations of the GST Council, has issued notifications bringing essential food products, including rice, flour, chana, paneer, curd, buttermilk, jaggery, khandsari sugar, maize, etc., under the ambit of GST taxation, from July 18, 2022.

“This will push up the prices of essential food articles, affecting the general public,” S Rethinavelu, Founder & President of Agrofood Chamber, said in a statement.

In its 47th meeting, the GST Council recommended that pre-packed and pre-labelled retail packs in terms of the Legal Metrology Act be taxed. But now, adding salt to the wound, the words “retail pack” are missing in the notifications issued by the Central government, giving scope for different interpretations that even the “wholesale packing” is also taxable, which is beyond the scope of the GST Council’s recommendations. 

Totally confused

The entire food product trade is totally confused as the implementation date is nearing. This is yet another instance of the GST implementation conundrum the trade is facing. There is no one to hear the grievances of trade and industry. The Group of Ministers (GoM) nominated by the GST council had not heard the opinion of trade and industry before recommending an upward revision in the rate of tax for a number of goods and services, the statement added.

The Agrofood Chamber indicated that this is the most opportune time for the Tamil Nadu Government to follow the Supreme Court judgment passed on May 19, 2022, that the recommendations of the GST Council were not binding on the Union or State Governments, reiterating the States’ right to legislate on taxation. 

“We request our Chief Minister to announce that Tamil Nadu would not accept the recommendations of the GST Council in the matter of levying tax on essential food articles so that many other States would follow suit,” it said.