GST on packaged food rued

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Retailers want the government to tax both branded packaged and unbranded loose cereal and food grains equally. The current policy indicates that the government perceives packaged items not good for consumers. Items such as cereals and food grains when sold loose are GST-free, while the government imposes a five per cent GST on branded food grains and cereals. “This seems to imply that items that are packaged are to be taxed while those that are not packaged are not be taxed. The perception seems to be that packed items are not good for consumers and companies selling the packed items are making more money,” fins Retailers Association of India.

Packaging is critical for transportation, preservation, quality, shelf life, protection against the elements and adulteration. It is observed that in case of commodities such as milk, water, edible oil, honey, grains, tea, wheat flour and sugar that are sold in loose form, the adulteration is as much as 80-90 per cent. Any adulteration in packaged commodities is traceable since the name of the manufacturer is specified.

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