Agrofood chamber wants branded essential food products exempted under GST

The Agrofood Chamber of Commerce and Industry is seeking exemption of all branded essential food products under the GST at par with unbranded products. The chamber has proposed this in a pre-budget memorandum for the year 2022-23.

S Rethinavelu, the agro-food chamber president, said this has been a long pending demand of the industry. “Unbranded essential food items such as rice, wheat and pulses are exempted from GST. But the same when branded attract 5% GST, making them expensive or forcing brands to disown the brand names with a disclaimer.”

He believes the government should encourage companies and traders to go for branded essential food items by exempting them under GST. “By going with the brand name, the companies have the responsibility of giving quality products to the consumers and to promote the brand name. As brands disown their names with a disclaimer to avail tax exemption, there is a threat for misuse of their names by anyone.”

The chamber also raised the issue around Circular No 10/2019 Q1/17253/2019 dated May 31, 2019 on the dos and don’ts at the time of vehicle checking, survey, inspection and raids. It highlighted that the penalty of 200% can be levied in case of any mistake in e-way bill with effect from January 1, 2022.

Rethinavelu has described it as draconian and called for its immediate withdrawal. He said the e-way bill for transportation is generated from the GST portal based on information such as the registration number of the goods carrier, point of origin and destination and validity of the bill based on the distance. “The tax is Rs 1 lakh or much more for a truckload of the goods and levying double of it as penalty without giving the consigner to offer an explanation is unacceptable.”

Also Read: RedDoorz to enhance customer experience with Haptik

The Chamber has sought one tax for all the products covered under one chapter for ease of doing business, deregulating the cereals, pulses and staples from the Essential Commodities Act, 1955, abolition of cess levied on farm produce that is sold outside the Agricultural Produce Marketing Committees and increasing the threshold limit for the service sector from Rs 20 lakh to Rs 40 lakh for the benefit of small service providers.