FAQ: Which Items to Not Attract GST When Sold Loose?

Nirmala Sitharaman on Tuesday, announced a list of items that will not attract GST if sold loose.

GST will not be levied on these 14 items when sold loose. Here's all you need to know. 

(Photo: iStock)

Union Finance Minister, Nirmala Sitharaman, on Tuesday, 19 July, released a list of food items that will not attract any Goods and Services Tax (GST) if sold loose, and not pre-packed or pre-labeled.

The FM tweeted and clarified the decisions taken in the 47th meeting of the GST Council.

The announcement comes amidst protests and criticism by the Opposition over the levying tax and price rise of daily essential goods.

Which goods are on the list? What is the rationale behind this? We answer all your questions.

Q. Which items will not attract GST if sold loose?

The following items will not attract GST if they are sold loose, ie, they are not ‘pre-packaged’ and ‘labelled’-

● Pulses/Dal

● Wheat

● Rye

● Oats

● Maize

● Rice

● Aata/Flour

● Suji/Rawa

● Besan

● Puffed Rice

● Curd/Lassi

Q. What did the Finance Minister say?

The decision to tax mass consumption items has been taken by the GST council consisting of representatives from all states unanimously. The decision has been taken to plug tax leaks; the finance minister stated.

The minister also said in a tweet that this was not the first-time food grains were being taxed, Punjab and UP collected two thousand Crores and seven hundred crores respectively from Purchase Tax, adding a list of states which levied VAT on rice.

“When GST was rolled out, a GST rate of 5% was made applicable on BRANDED cereals, pulses, flour. Later this was amended to tax only such items which were sold under REGISTERED brand or brand on which enforceable right was not foregone by supplier.”

FM Nirmala Sitharaman in her tweet

She went on to say that however this rule was exploited leading to tax leaks and therefore, to impose GST uniformly on all packaged goods these decisions were taken by the ‘Fitment Committee’ consisting of officers from various states.

She clarified that “only the modalities of imposition of GST on these goods was changed with no change in coverage of GST except 2-3 items” in a thread containing of fourteen tweets, you can read the full thread here.

What will become costlier?

● Packaged food: pre-packed curd, lassi, and buttermilk will now attract GST.

● Hotel rooms: Rooms priced at Rs 1,000 or less per day will attract 12 percent GST.

● Cheque books: 18 percent GST to be levied

● Printed Maps: Charts of all kinds, including atlases, wall maps, topographical plans and globes, will attract 18 percent GST

● Post office services will now be taxed. An exception, however, has been provided for postcards and inland letters, book posts, and envelopes weighing less than 10 gm.

● Led lights and lamps: LED lights and lamps, fixtures, and their metal printed circuit boards increased from 12 percent to 18 percent.

● Printing, writing, and drawing ink: GST rate increased to 18 percent GST from current 12 percent.

● Knives: Prices of knives along with cutting blades, paper knives, pencil sharpeners and blades, spoons, forks, ladles, skimmers, cake-servers, etc, is also going to go up from 12 percent to 18 percent.

● Machines for cleaning, sorting, or grading seeds and grain pulses, machinery used in the milling industry or for the processing of cereals, etc, pawan chakki or air-based atta chakki, and wet grinders will now attract 18 percent GST as opposed to the current 5 percent.

Milking machines and dairy machinery will also cost more as their GST is being spiked from 12 percent to 18 percent.

What will become cheaper?

● Ropeway rides: The GST Council has brought down the tax on ropeway rides from 18 percent to 5 percent.

● Rent of goods carriage: The renting of trucks or goods carriages when cost of fuel is included, is set to become cheaper as its GST is set to go down from 18 percent to 12 percent.

● Ostomy appliances: GST for these appliances is set to reduce from 12 percent to 5 percent.

● Orthopaedic appliances: Items like splints and other fracture appliances; artificial parts of the body; other appliances which are worn or carried or implanted in the body to compensate for a defect or disability; and intraocular lens will become cheaper as their GST is set to drop from 12 percent to 5 percent.

● Defence Items: IGST on specified defence items imported by private entities/vendors, when the end-user is the defence forces, has been exempted.