No GST on food items sold by small stores: Kerala FM

State finance minister KN Balagopal said the government will not overburden small-scale traders, small shopkeepers and organisations such as Kudumbhasree reeling under the impact of the pandemic.

The CPI(M)-led Kerala government on Wednesday said it will not tax items sold by “Kudumbhasree” (women self-help group) and small stores that sell one or two kg packets, as protest against imposition of goods and services tax (GST) on packed essential commodities mounted in the state.

The CPI(M)-led Kerala government on Wednesday said it will not tax items sold by “Kudumbhasree” (women self-help group) and small stores that sell one or two kg packets, as protest against imposition of goods and services tax (GST) on packed essential commodities mounted in the state. (HT)

State finance minister KN Balagopal said the government will not overburden small-scale traders, small shopkeepers and organisations such as Kudumbhasree reeling under the impact of the pandemic.

Chief minister Pinarayi Vijayan sent a letter to prime minister Narendra Modi on Wednesday on the issue, he told the state assembly.

“We don’t intend to tax items sold by organisations such as Kudumbhasree and small stores which deal with one or two kg packets. We don’t mind if it creates issues with the union government. We cannot push these small outlets to the extreme,” he said.

The minister put out an explanation for this, saying branded companies have to pay a five per cent tax, if these small outlets mention on the packet that “they are not claiming any brand, then it cannot be taxed.”

He said Vijayan had written a letter to Modi citing practical difficulties in this regard. He said Vijayan pointed out that such pre-packing was a common practice in most retail outlets in the state and such a change will have an adverse impact on them and consumers.

Union finance minister Nirmala Seetharaman on Tuesday said the decision to hike GST on specified food items sold in packets was taken after the consent of all states, including Kerala. She also said this was not the first time such food items were taxed and in pre-GST era states such as Punjab and Uttar Pradesh collected enough tax from food grains.