The GST Council at its meeting in June 2022 had decided to impose 5% GST on pre-packed and pre- labelled rice of 25 kg bags and less. This has led to an increase in the price of the commodity, affecting people of middle and low income groups, who usually purchase rice in five or 10 kg bags depending on their family requirements, said a resolution adopted at the general body meeting of the Federation of Tamil Nadu Rice Mill Owners and Paddy-Rice Dealers Associations here on Sunday.

Post-liberalisation, the entire country was treated as a single food zone, and rice mills and traders had been transporting foodgrains without any issues. They have now been badly affected by the GST council’s decision, the federation said and urged the Centre to withdraw the decision.

The federation also called for the full waiver of 5% GST on husk, a by-product at rice mills. Husk sent to solvent plants attract 5% GST. However, husk sold as cattle feed is exempt from GST. This has caused needless confusion. The GST Council should do waive the levy entirely for rice husk.

The federation appealed to the State government to desist from collecting market cess under the Agricultural Marketing Act of 1987 from rice millers for the rice procured from traders and farmers. Despite repeated requests, the issue has not been resolved, another resolution said and requested the Chief Minister to consider the demand favourably.

Source: The Hindu