The Controversy Over GST Levies On Food

At the GST Council meeting in Chandigarh last month, chaired by Finance Minister 'Nirmala Sitharaman', a 5% GST has been levied on unbranded packed food items. Earlier, these items like curd, lassi, buttermilk, puffed rice, wheat, pulses, oats, maize, and flour, etc were exempted from the GST net.

Other items which now will have to lost their tax-exempt status, include bank cheques, maps and atlases, hotel rooms that cost upto ?1,000 a night, and hospital room rents of over ?5,000 per day.

The government said that the earlier tax exemption triggered 'rampant misuse' by reputed manufacturers and brand owners leading to a gradual drop in revenues. Finance Minister also pointed out that all affected food items including wheat, pulses, curd and lassi, will be exempt from GST when sold loose. It is also clarified that pre-packed items weighing over 25kg would attract GST. 

But this change has called for some controversies; the Confederation of All India Traders (CAIT), has urged all Chief Ministers to roll back the tax by holding an emergency meeting of the GST Council, arguing that 85% of the country's consumers use such unbranded goods. 

From these taxes, there would be a marginal impact on India's consumer inflation rate that has now been over 7% through the first quarter of 2022-23. The GST Council is also expected to meet again in August, where the issue may be ranked up afresh.