Two recent communications of the Central government have indicated that rice sold in retail, irrespective of the quantity that is packaged, may soon attract 5% GST.

M. Sivanandan, president of Tamil Nadu Rice Millers Welfare Forum, said the two communications were circulated widely on social media and many rice millers and traders did not have clarity. Most of the rice brands were selling bulk quantities in bags of 26 kg or more till now. However, when the Legal Metrology (Packaged Commodities) Rules, 2011, are amended as proposed by the Ministry of Consumer Affairs, Food and Public Distribution, rice sold in retail in any quantity would attract GST.

While this has brought to conclusion the confusion among rice millers and traders and millers can take input tax credit for all the inputs they buy, it will also bring all those who sell rice in retail under the GST. Institutional sales will, however, continue to get exemption.

“The move may not impact prices for the retail consumers as prices move according to demand and supply. Rice should ideally be exempted fully from GST and we request the government to consider it,” he said.

Source: The Hindu