CAIT urges Govt to exempt food items with registered trademark from GST

CAIT urges Govt to exempt food items with registered trademark from GST

CAIT said small manufacturers of food items acquired trademark to comply with the food standards.

The Dollar Business Bureau

Traders' body Confederation of All India Traders (CAIT) on Tuesday urged the Government for exempting branded as well as non-branded food commodities with registered trade mark, from the Goods and Services Tax (GST). 

The traders' body reasoned that the differentiation made by the GST Council for levying 5% tax on branded food items with a registered trademark will promote adulteration and result in lower remunerative prices for farmers even for high quality produce.

In a letter to Finance Minister Arun Jaitley, CAIT said, “Under the pretext of 'branded' products, these items have been made taxable at 5% which will prove to be detrimental and in contradiction of the intention of the government.” 

CAIT further said that small firms who are manufacturing food grains, pulses and other agricultural products have acquired registered trademark in huge numbers all over the country majorly to conform to the standards recommended under the Food Safety and Standards Act. 

“Around 50 big corporate houses are manufacturing these items making nearly 15% of the overall market under their own registered brand while the rest of 85% is being produced by small and medium enterprises (SMEs) and around 40% of the SMEs are conducting their business under a registered trade mark,” CAIT said. 

This assessment amply shows the fact that around 50% of food grains, pulses and other agricultural commodities will comes under the tax slab of 5% in GST much more against the government’s intention, it added.

The Dollar Business Bureau - Jun 21, 2017 12:00 IST