Trade chamber backs GST reforms, seeks tax exemption for packaged food grains

The Agri and All Trade Chamber welcomed recommendations from the 57th GST Council meeting on simplifying tax procedures but urged the Council to remove the 5% GST on certain packaged food grains. The chamber said the levy depends on package size and weighs more heavily on people buying smaller quantities.

In a statement on Friday, the chamber’s senior president, S. Rethinavelu, and president, K. Thiruppathi Rajan, backed recommendations from the meeting chaired by Union Finance Minister Nirmala Sitharaman. Measures they welcomed included removing GST arrest provisions, raising the prosecution threshold from ₹1 crore to ₹5 crore, reducing general penalties, simplifying registration and speeding up refunds.

The chamber objected to retaining a 5% levy on specified pre-packaged and labelled rice, wheat, pulses and flour in packs of up to 25 kg. Under the existing rule, packages above 25 kg are exempt. Its representatives questioned why the same grain is taxed in a 5 kg or 10 kg pack but not in a 30 kg pack, and argued that tax should be based on the product rather than package size.

The chamber said smaller packs are bought mainly by households, including lower- and middle-income families. It called for essential food grains and basic products to be exempt from GST regardless of packaging, branding or labelling. It also renewed calls for input tax credit on commercial and industrial buildings used for taxable business, protection for buyers when suppliers default on GST, and an end to disproportionate interest, penalties and retrospective tax demands.

The Finance Ministry’s release on the 57th Council meeting confirmed recommendations on GST process reforms, including changes to arrest provisions and the higher prosecution threshold. It said the recommendations would take effect through relevant circulars, notifications or amendments to law.