Tamil Nadu: Mill owners seek rollback of GST on branded rice

CHENNAI: The Federation of Tamil Nadu Rice Mill Owners and Paddy-Rice Dealers Associations on Friday urged the Central government to withdraw the 5% GST on branded rice, amend key GST provisions affecting the sector and rationalise market fee regulations, while asserting that there is no shortage of rice in the State and that prices are expected to soften once the new paddy harvest reaches the market.

Addressing reporters here, the federation secretary AC Mohan said the GST Council's June 28, 2022, decision to impose 5% GST on pre-packed and labelled rice had increased the burden on both consumers and the rice trade. He pointed out that rice packed in quantities above 25 kg or 25 litres is exempt from GST, forcing many traders to market rice in 5 kg and 10 kg packs without brand names to remain competitive. The association urged the GST Council to revoke the levy on branded rice at its forthcoming 57th meeting.

The federation also sought amendments to GST provisions governing solvent plants, arguing that the existing framework has created avoidable compliance issues. It requested a uniform 5% GST rate across the segment to eliminate ambiguity in taxation.

At the State level, the association demanded amendments to the Tamil Nadu Agricultural Marketing Act, 1987, contending that market committees continue to collect market fees from rice millers despite there being no legal provision for levying such charges on paddy converted into rice. It also sought the withdrawal of market fee collections at paddy procurement centres and rice procurement depots.

Rejecting concerns over availability, the federation said there is no shortage of rice in Tamil Nadu. It maintained that supplies remain adequate and expressed confidence that rice prices would decline once the fresh paddy crop begins arriving in markets in the coming weeks.