Nagpur: Dr Dipen Agrawal, National Vice President of Bhartiya Udyog Vyapar Mandal (BUVM) and President of Chamber of Associations of Maharashtra Industry & Trade (CAMIT) met union minister Nitin Gadkariand submitted a memorandum on recent implementation of 5% GST on essential items requestinghis intervention in the matter.
Dr Dipen Agrawal, informed union minister that 5% GST being made applicable on pre-packed and labelled food grains like pulses, flour, cereals and other edible items. Further deliberating on the issue Dr Agrawal explained that upon conjoint reading of the provisions of Legal Metrology Act (LM Act) and Rules it can be seen that if goods are placed in package in absence of purchaser and in pre-determined quantity (as stipulated under Rule 5 r/w Schedule II) then only the goodsshall fall under the definition of pre-packed commodities and attract the requirement of declaration u/s 18 of the Act. The FAQ issued by administration is silent on this inconsistency between Rule 3 and Rule 26 of the Legal Metrology (Packaged Commodities) Rules, 2011.
Dr. Agrawal brought in the notice of Nitin Gadkari thatthe objectives of the LM Act is to protect the interest of consumers. The LM Act stipulates that every pre-packaged commodity has to be manufactured, packed, imported or sold in such standard quantities or numbers as may be prescribed, if the consumer is not present while goods are placed in the package. The LM Act exempts from its ambit the packing of goods by the seller in presence of the consumer, presumably because the consumer is deemed to have taken care of the quality and quantity of the goods packed in his presence. However, under GST in addition to seller and purchaser the revenue department is also a stake holder. Hence, the satisfaction of revenue officer that goods were packed in presence of purchaser and not in his absence shall give birth to endless litigation.
In 2017 the Fitment Committee after considering the then prevailing Excise Duty and Value Added Tax for Goods, and Service Tax and Value Added Tax for Services decided revenue neutral rate under GST for particular good or service. Further, time and again nation was assured by government and administration that the goods and services exempted under erstwhile tax regimes shall continue to be exempted under GST.Dr. Agrawal, further said that since independence no government has taxed subsistence consumption of its citizens. The tax on such consumption is against the ethos of welfare state.
Dr. Agrawal informed that resentment among the farmers, business community and citizens is alike. There is confusion all over. Traders will be burdened with GST compliance. Farmers fear reduction in realisation. Citizens who are already facing the heat of inflation fear further dent in their household budget. Dr. Dipen requested to union minister Nitin Gadkari to intervene in the matter and to use his good office with union government / GST Council to impress them to revisit and recall the decision to levy 5% GST on pre-packed and labelled food grains instead of levy of GST on branded food grains.
Nitin Gadkari, afterpatiently hearing the issues,assured to take up the matterFinance Minister and Party leadership.
Dr Dipen Agrawal on behalf of business community of the nation expressed his gratitude towards Union Minister, Nitin Gadkari for the patient hearing and assurance.
