Unregistered food brands also attract 5% GST: Group of Ministers

A group of ministers (GoM) reviewing the rates of goods and services tax (GST) has decided to abolish the exemption for packaged food if it is sold under unregistered brands.

These items will be taxed at 5%, the rate for branded food.

The move stems from the misuse of the exemption for unbranded food from part of the food industry, including rice and wheat millers.

According to a source, the decision was made by the country’s government, led by Karnataka Chief Minister Basavaraj Bomai, who met on Friday.

“Tax exemptions will not be allowed for food products where brands are used but which are claimed not to be claimed,” the source said.
The recommendation will be considered by the GST Council, which will meet on June 28-29 in Srinagar.

The Government has also decided to seek more time from the GST Council to finalize its main report on the restructuring of GST Slabs.

His term of office may be extended until November-December.

The decision of the Government of the Government follows the decision of the Supreme Court in Tripura against Sarvasiddhi Agrotech of April 20, 2021, in which the court upheld the company’s tax claim for the sale of packaged rice under labels such as Aahar normal, Aahar Gold, Aahar premium.

The company claimed that these were not brand names, but an “internal agreement” to indicate the diversity of quality.
The Revenue Department claims that these marks are nothing but brand names, as the supplier has not waived a claim / enforceable right.

The department strives to tax the items with 5%.

While the long-awaited restructuring of GST Neutrality Raising Plates (RNR), from just over 11% now to 15.5%, may begin shortly this year in non-inflation-prone areas, the GST Council is likely to consider implementing the recommendations of the Ministerial Panel on data analysis to strengthen compliance and control of GST returns in order to increase revenue by plugging leaks.

It may consider raising the GST on online games from 18% to 28% to bring the tax rate on skill games on par with casual games involving gambling and betting, sources said.

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