Opposition to 5% GST on essentials — CAIT demands rollback

The GST levy of 5 percent on food items like pulses, cereals, flour and other edible products has run into headwinds. At its last meeting, the GST Council had decided to levy 5 percent GST on pre-packaged and labelled staples up to 25 kg. The Centre says the decision was unanimously taken by the council and had the buy-in of states as well.

Trade association CAIT has asked the Centre and states to call an emergency meeting of the GST Council to review this decision.

Meanwhile Kerala’s finance minister K N Balagopal has said state-run self-help groups and small stores will not abide by the GST council’s decision — this could open up a Pandora’s box if other states decide to follow suit.

The Supreme Court, on May 19, had ruled that that GST Council’s recommendations only have persuasive value, and are not binding on the Centre and states. However, the government has told Parliament that GST council’s decisions pertaining to rules, notifications and rates are binding on both the states and Centre.

So where does this leave the GST rate regime? To discuss this, CNBC-TV18 spoke to Najib Shah, former Chairman of CBEC; MS Mani, Partner at Deloitte India; and Abhishek Rastogi, Partner at Khaitan & Co.

Also Read: Pre-packaged and labelled food packs over 25 kg will not attract 5% GST