The recently introduced rate hike means that customers will now have to pay GST for pre-packaged and labelled foods including curd and milk.
The Central government announced that there will be no GST for unpacked, unlabelled and unbranded goods or packaged food grains weighing more than 25 kgs.
As the Goods and Services Tax (GST) on several items, especially packaged food, came into force on Monday, political parties from the South attacked the Prime Minister Narendra Modi-led government for causing distress among the poor and middle class who are already suffering from inflation.
The two-day GST Council meeting held in Chandigarh last month, headed by Finance Minister Nirmala Sitharaman, recommended a tax hike for a number of goods and services in order to increase revenues.
The recently introduced rate hike means that customers will now have to pay GST for pre-packaged and labelled foods including curd, milk, fish, paneer, rice, and wheat.
List of items to get costlier. (Graphic/Ajay Tomar)
Hospital rooms above Rs 5,000 and bank cheque book issuance will also get costlier.
Besides this hotel rooms upto Rs 1,000 per day, non-ICU hospital beds over Rs 5,000 per day, solar water heaters, LED lights, lamps, knives, pumps, drawing and marking instruments, and work contracts for roads and bridges will also see a price hike.
Moreover, prices have been hiked for obtaining work contracts for railways, bridges, roads, metro, crematoriums and treatment plants.
The Central government announced that there will be no GST for unpacked, unlabelled and unbranded goods or packaged food grains weighing more than 25 kgs.
The GST council has also passed tax exemptions on various goods or services including transportation equipment, electric vehicles, a rented goods carriage, orthopaedic and ostomy appliances, and transport of goods and services by ropeways will get cheaper.
DMK Member of Rajya Sabha Tiruchi Siva condemned the GST hike in goods and services.
Speaking to South First, he said, “This hike will be hitting people below the belt. Already they are suffering from inflation. Tax collecting should be without any pain to people but the government is injuring them. There is no concern for the poor people.”
Items having GST slash. (Graphic/Ajay Tomar)
The former Pudukkottai MP added, “We will be raising this issue again in the Rajya Sabha.”
On Tuesday, both Rajya Sabha and Lok Sabha were adjourned due to the GST rate hike. This was the second day in a row when the upper house of Parliament — Rajya Sabha — had to be suspended amid protests.
Kerala Finance Minister KN Balagopal took to Facebook to express his annoyance. He wrote, “Kerala will not support tax proposals which greatly increase the prices of essential commodities and adversely affect the lives of common people. Kerala has made its stand very precisely on this issue in T Council meetings too and asked Centre to withdraw the hike in tea rate.”
Balagopal claimed that the State conducted a study of the price-quality of around 25 products and the products whose tax was reduced from 28 to 18 percent did not get cheaper in the market but it increased profits for companies. “It means that the benefit of the tax cut is not reaching the people,” he added.
On a similar note, former Finance Minister of Kerala Thomas Isaac asked the Central government to withdraw tax on necessities and increase tax on luxuries.
The imposition of 5% GST on items of common consumption like grains and curd that were so far exempted is regressive. Tax on packed grains below 75 kg will result in the increase of prices of grains sold in retail.Withdraw tax on necessities and increase tax on luxuries.
— Thomas Isaac (@drthomasisaac) July 17, 2022
“When Government of India introduced GST, PM boasted of no taxation as it will affect common people. But latest additions of GST on milk, curd, atta proves that Mr. Modi does not stand by his word. Government is burdening citizens in every possible way,” TRS spokesperson Krishank Manne told South First.
Taking a swipe at PM Modi led BJP, he added that the party has failed in its economic policies to cover up the financial situation.
On a similar note, Congress MP from the state capital Thiruvananthapuram in Kerala tweeted:
Joined the Opposition protest in front of Parliament this morning. It is truly outrageous that at a time when prices are spiralling upwards, the rupee is collapsing &people’s salaries are feeling the pinch, the Govt increases GST across the board on items of common consumption! pic.twitter.com/NL7Sf2xTgO
— Shashi Tharoor (@ShashiTharoor) July 19, 2022
Tharoor’s party colleague and AICC National spokesperson Dasoju Sravan called it a flaw of perspective by the government and not just the policy. He told South First, “This will break the spine of common people. The government is doing business and not welfare for people.”
“In a country where there is 70 percent agrarian society and below the poverty line, food taxation will act as a burden. Poor people were already unable to make ends meet without food tax and now this going to cause a lot of hunger,” Syed Shafiullah, Vice-President of JDS explained to South First.
He added that Union Finance Ministry has made food a “luxury item” and that the GST hike “will benefit the corporate sector.”
Meanwhile, YRS Congress Party spokesperson Nagarjuna Yadav and TDP’s Jyothsna Tirunagari declined to comment on the GST rate hike.
Defending the GST council’s decision Union Finance Minister Nirmala Sitharaman claimed it was much needed to curb tax leakage.
The finance minister on Twitter wrote, “All States, including non-BJP States (Punjab, Chhattisgarh, Rajasthan, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, Kerala) agreed with the decision. This decision of the GST Council is yet again by consensus.”
Sitharaman added that food articles are not being taxed for the first time while sharing a list of 14 states, which were charging taxes on rice.
Recently, the GST Council in its 47th meeting recommended to reconsider the approach for imposition of GST on specified food items like pulses, cereals, flour, etc. There have been a lot of misconceptions about this that have been spread. Here is a thread to lay the facts: (1/14)
— Nirmala Sitharaman (Modi Ka Parivar) (@nsitharaman) July 19, 2022
The Finance Minister also alleged that the initial 5% GST on branded food items, which was later amended to items sold under registered brands, was misused by reputed manufacturers and led to GST revenue fall from these items.
In response to the finance minister’s claims of the decision was taken unanimously, senior Congress leader and Rajya Sabha member from Karnataka Jairam Ramesh said that a West Bengal Minister disclosed that she and some others opposed the decision of the committee that recommended the increases.
The former UPA Union Minister added that according to the West Bengal minister “it was a virtual meeting and the finance minister did not meet face to face or consulted anyone.”
“It is cruel to raise tax rates when CPI inflation is over 7%, WPI inflation is over 15%, unemployment is high, the rupee is depreciating, the current account deficit is widening and inflation is expected to rise worldwide,” Ramesh added.
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