Pre-packed, labelled food items to now attract GST

Non-BJP ruled states bat for continuation of compensation at Council meeting
Pre-packed, labelled food items to now attract GST

NEW DELHI: Pre-packed and labelled food items like meat, fish, curd, paneer and honey will now attract GST, a tax that will also be levied on the fee that banks charge for the issue of cheques.

This after the GST Council accepted most of the recommendations of a group of ministers from states on withdrawing exemptions with a view to rationalising the levy, officials said.

The panel headed by Union Finance Minister Nirmala Sitharaman and comprising representatives of all states and UTs, on the first day of the two-day meeting accepted the GoM’s recommendation for reviewing the exemption from GST that packed and labelled food items currently get. The Council is likely to discuss on Wednesday the demand for an extension of compensation paid to states for revenue lost from their taxes such as sales tax (VAT) being subsumed into a national GST, besides a 28 per cent tax on casinos, online gaming and horse racing.

Non-BJP ruled states such as Chhattisgarh want the compensation regime to be extended or the share of states be increased to 70-80 per cent from the current 50 per cent. They also cited a recent Supreme Court ruling that decisions made by the Council are not binding on states and any decision not taken unanimously could potentially lead to unraveling of the landmark economic reform.

The report of the state finance ministers on GST systems reforms, which recommended biometric authentication of high risk taxpayers and real-time validation of bank accounts too was cleared.

With regard to e-way bill on intra-state movement of gold, gold jewellery and precious stones to check evasion, states can decide on the threshold above which the electronic bill is to be made mandatory.

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