New Delhi: Pre-packaged food items, including cereals and pulses, weighing less than 25 kilogram, are to attract five per cent Goods and Services Tax (GST) with effect from July 18.
The Finance Ministry claims that if the retail shopkeeper buys packages weighing less than 25 kg and retails the same in loose quantities, the consumer would not be affected by this GST. Though such a sale to the consumer cannot levy tax, the tax burden imposed on the retailer would be added up to the price while selling. This, in turn, would lead to a price rise.
Pre-packaged and labelled food items, including cereal like rice, pulses and flour, would attract 5 per cent GST if the package weight is below 25 kilogram.
While the retail shopkeeper buys such a package from the manufacturer or the wholesale distributor, he is to pay a GST of 5 per cent. This is because the packaging is such that it is intended to be sold to the customer as it is. However, if the retail shopkeeper sells it in loose quantities to the customer, he cannot levy the GST on the consumer, the Finance Ministry says.
The tax, which was only applicable to registered, branded packages of food items weighing below 25 kilogram, has been effected to all food items packaged and labelled, weighing below 25 kg from yesterday.
Questions and answers
•Does the 5 per cent GST apply for a pack of atta (wheat flour) weighing less than 25 kilogram?
Yes. All packaged and labelled food items weighing below 25 kilograms, including cereals, pulses, and flours, will attract a GST of 5 per cent. However, if you choose to buy a 30-kilogram pack instead, there is no tax on it.
•While GST is applicable on packages weighing below 25 kg, is it levied on a bundle of 10 sacks of 10 kilogram each?
Yes. As the packages are intended for retail sale as such in the same package, GST does apply for all the ten packages weighing ten kilograms each, even if sold as one bundle.
•Does the GST apply if a rice mill owner sells rice sacks of 20 kilogram each, without meeting the stipulated labelling and packaging norms set by the Legal Metrology Department?
Yes, it does. As the weight is below 25 kilogram, the Legal Metrology rules must be adhered to.
