The decision of the Union government to levy 5% Goods and Services Tax (GST) on packaged food may increase the price of rice by a minimum of Rs 3 to Rs 5 per kg from Monday, Tamil Nadu rice mills association and traders said on Saturday.
Based on the recommendation of the GST Council, the Centre has issued notifications bringing essential commodities including rice and maize under 5% GST slab from July 18. All pre-packed and pre-labelled goods as defined under the Legal Metrology Act will attract the new tax.
Processing of about 25,000 metric tonnes of rice in over 1,000 rice mills in Kanchipuram, Chengelpet, Tiruvallur and Chennai were halted because of the protest on Saturday.D Thulasingam, president, Federation of TN Rice Mill Owners and Paddy Rice Dealers Association, said the 5% GST on rice bags will jack up the cost of rice by Rs 3 to Rs 5 per kg from Monday.
S Rethinavelu, founder and president of AGROFOOD Chamber of Commerce and Industries, said, “At its 47th meeting, the GST Council recommended that pre-packed and pre-labelled retail packs be taxed. But now, the words “retail pack” is missing in the notification issued by the Centre giving scope for different interpretation and even “wholesale packs” will be taxable.”
