No GST on food items when sold loose: FM Nirmala Sitharaman

New Delhi: Union Finance Minister Nirmala Sitharaman on Tuesday gave a list of food items that are exempted from GST, provided they are sold loose and not pre-packed or pre-labelled.

The list includes items such as pulses/daal, wheat, rye, oats, maize, rice, aata/flour, suji/rawa, besan, puffed rice and curd/lassi.

The minister in a series of tweets clarified the new rates on GST which came into effect on Monday. The move comes after Lok Sabha proceedings were adjourned on Tuesday amidst Opposition protests over GST rates and price rise.

Sitharaman defended the imposition of 5% GST on food articles in her tweets and said that the decision was unanimous by the GST Council and all states were present in the GST Council meeting when this issue was presented by the Group of Ministers on Rate Rationalisation on June 28, 2022. "At the 47th GST Council, no state opposed the move to bring the pre-packaged commodities under GST," she added.

She said that this isn't the first time that such food articles are being taxed. "States were collecting significant revenue from foodgrain in the pre-GST regime. Punjab alone collected more Rs 2,000 crore on food grain by way of purchase tax. UP collected Rs 700 crore."

Explaining the GST, she said that when GST was rolled out, a GST rate of 5 per cent 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. However, she said that soon there was rampant misuse of this provision by reputed manufacturers and brand owners and gradually GST revenue from these items fell significantly.