The Goods and Services Tax (GST) on a clutch of food and other daily-use items could be reduced by the GST Council as it meets in Hyderabad on September 9. The council’s fitment committee, after vet-ting several recommendations from industry and state governments, have identified these items for tax relief, official sources told FE.
Additionally, the council may also bring amendments to thwart the practice of registered cereal brand owners de-registering the brands to avail zero GST benefit. The tax treatment of branded and unbranded grains under GST has created a curious situation where some of the leading companies in this business escape the tax while others pay a tax of 5%. While the All India Rice Exporters Association had written to the finance minister Arun Jaitley seeking to remove the anomaly, the ministry has so far been maintaining that “unless the brand name or trade name is actually on the Register of Trade Marks and is in force under the Trade Marks Act, 1999”, the 5% GST will not be applicable on the supply of such goods.
The fitment committee has now recommended that any brand that was a registered one on May 15 will be deemed to be registered, even if was subsequently de-registered.
According to the sources, the fitment committee has also recommended that GST rate for dried tamarind be brought down to 5% from the existing 12%. This item consumed by common people was VAT-exempt in some states in the pre-GST period.
Also, the committee has sought a reduction in rates for roasted grams to 5% from 12% as the process involves only roasting, and it is used for making “sattu flour” which attract 5% GST. The rate for custard power could also come down to 18% from 28% as it is used by lower- and middle-income families.
The council will also consider lowering the rates for idli and dosa batter to 12% from 18% currently. The reduction has been sought on the grounds that these batters are wet mix of cereal and leguminous vegetables, which are taxed at nil GST rate.
Besides, GST on corduroy fabrics is sought to be lowered to 5% from 12% currently and the same is to be done for saree falls. The fitment committee has also recommended that brooms and toothbrushes be tax free against 5% GST levied currently while rosaries and prayer beads be charged 5% tax compared with 18% now.