A Goods and Services Tax (GST) panel is finalising classifications of millet-based products to determine the tax rates applicable on them.
According to sources, the fitment panel – comprising officials from the Centre and states – would classify products where millets are a dominant ingredient.
At present, there is no specific entry for millet-based health mix products under the GST. Therefore, such products currently attract a GST rate of 18 per cent under the residual entry.
“The panel will see the proportion of millet and other ingredients in the health mix to assess where it will fit in the classification,” said a senior official privy to the development.
At present, a typical millet-based health mix contains small quantities of flour, groundnut powder, pulses, etc, roasted in the same manner as millets. Certain goods such as cardamom and pepper may also be added in minute quantities for flavour. All such products are mixed, powdered and packed for sale.
The panel will likely propose the classification at the next GST Council meeting, which is expected to be held at the end of May or in June.
Major fast-moving consumer goods companies are foraying into this segment to promote millet-based healthy diet options. Besides, the Union government too is advocating for millet-based products to help increase farmers’ income.
“Ready food category comes under different classification, we need to see where millet-based mixes could be placed, and tax rates will apply accordingly,” another official said.
The matter was taken up at the previous GST Council meeting held in February, where the fitment panel had recommended a reduction of rates to nil or 5 per cent (depending on packaging).
It suggested that no tax be levied if the product comprised at least 70 per cent of millets and was sold loose and 5 per cent if it was packaged or labelled.
However, the matter was deferred by the council for further deliberation. “On the levy of the millets, nothing was arrived at. Discussion on the percentage of millets in ready food category was discussed,” Union Finance Minister Nirmala Sitharaman had said after the previous council meeting.
Firms had requested that these products be treated on par with sattu, a mixture of flour of ground pulses and cereals that includes the flour, meal and powder made from peas, beans or lentils.
Millets were one of the key focus areas in the finance minister’s Budget speech. She said she wanted to make India the hub for millets. At present, India is the largest producer and second-largest exporter of millets.
Source: Business Standard