• Notification Date: 22-01-2022
• Notification No: N/A

All Branded Essential Food Products are exempted under GST

The Union Government has been receiving the request of exempting the brand food products under the Goods and Service Tax (GST) at the same rate along with the unbranded ones. The Agro-food chamber of commerce and industry has urged the government in this matter. A chamber in the pre-budget memorandum for 2022-23 has stressed this matter that has reached the union Finance Minister, Nirmala Sitharaman. The President of the agro-food chamber, S Rethinavelu has commented that this provision has been long expected to be introduced. He said that unbranded food items like rice, wheat, and pulses are exempted from GST. But if the same products are branded, then 5% GST is applied to them. He added that the government should make the branded products free from GST and encourage their business to prosper even more. By exempting the branded products under GST, the companies will make products of better quality to promote their brand and attract more customers. If the brands decide to drop their names and go unbranded to avail of tax exemptions, then there might be a risk of other companies using their brand name.

The Chamber also pointed out another issue. This is Circular No. 10/2019 Ql/17253/2019 dated May 31, 2019. This circular was related to the dos and don’ts that are to be followed during vehicle checking, survey, inspection, and raids. According to the Circular, a penalty of 200% can be charged for any mistake in an e-way bill with effect from 1 January 2022.

Rethinavelu stated that the information from the GST-based portal is used to generate the e-way bill for transportation. The tax for a truckload of the goods is Rs.1 lakh. It is unacceptable to charge double of the amount as a penalty from the consigner without a chance of providing an explanation.