GST Rate Hike on Rice, Wheat, Milk from today

From July 18, 2022, a number of items including pre-packaged foods are going to see a price hike as the government has decided to put them under the ambit of Goods and Service Tax or GST. 

The GST Council in its 47th meeting had unanimously decided to go for a rate hike on several daily essential items. 

The new GST rates on these items will come into effect from today. 

Single packages of food items like cereals, pulses and flour weighing up to 25 kg will be considered as 'prepackaged and labelled', and liable to 5 per cent GST from July 18, the tax department has said.

The CBIC (Central Board of Direct Taxes) on Sunday night issued a set of frequently asked questions (FAQs) on GST applicability on 'pre-packaged and labelled' goods, just a day before the five per cent GST on such items becomes applicable. 

In the context of food items (such as pulses, cereals like rice, wheat, flour etc), the supply of specified pre-packaged food articles would fall within the purview of the definition of 'pre-packaged commodity' under the Legal Metrology Act, 2009, if such pre-packaged and labelled packages contained a quantity up to 25 kilogram (or 25 litres).

The board also said that GST would apply on a package that contains multiple retail packages, for example a package containing 10 retail packs of flour of 10 kg each, the CBIC said. 

It said for the purpose of GST, pre-packaged commodity would mean a commodity which, without the purchaser being present, is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre- determined quantity. Any such supply which requires declaration under the Legal Metrology act would attract GST, it said further.