Kerala Finance Minister KN Balagopal said that the state would not impose Goods and Service Tax (GST) on essential items sold by small stores and Kudumbashree, (a network of women self-help groups).
Balagopal announced in the Kerala Assembly on Tuesday that the tax will not be imposed on loose packets or items sold by Kudumbashree and other entities sold in 1 or 2 Kilogram packets.
What the Kerala finance minister said
“At any rate, in Kerala, we don’t intend to tax items sold by organisations like Kudumbashree or in small stores in 1 or 2 kg packets or in loose quantities. Even if this will lead to issues with the Centre,” Balagopal told the Assembly. “We are not ready to compromise on this. We had already said this there.”
The Finance Minister also mentioned that the government had already written to the Centre, and chief minister Pinarayi Vijayan had written a letter again. The minister also assured that the small traders would be considered, so they don’t face any difficulties.
“We have given a letter earlier, and yesterday CM has also given a letter. We are not going to implement it in a way it will affect the small-scale traders and manufacturers,” he added.
Kerala government’s Kudumbashree, a women’s self-help group, is considered one of the country’s most prominent women empowerment projects. It’s engaged in ventures such as running small-scale food processing units and various others.
Balagopal said the branded companies have to pay a tax of 5 per cent on packaged products, but if they mention in the packaging that they are not “claiming the brand” then it is not taxed.
“So they (centre) have brought in the rule to catch such companies… but there is still some confusion prevailing over this,” he added.
GST on packaged food items implemented with the consent
Amid the growing protests over the decision to impose 5 per cent goods and services tax (GST) on specified pre-packaged food items such as pulses, cereals like rice, wheat, and flour (aata), etc, Finance Minister Nirmala Sitharaman said it had the nod from all states, including non-BJP ruled states.
Non-BJP ruled states of Punjab, Chhattisgarh, Rajasthan, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, and Kerala had agreed to impose the 5 per cent levy, she said.
Decision taken by the GST Council
In a series of tweets, Sitharaman said states levied sales tax or VAT on foodgrains in the pre-Goods and Services Tax (GST) regime and the present levy on cereals, pulses, flour, curd, and lassi is an exercise to curb tax leakage.
The decision, she said, was taken by the GST Council, where all states are represented through a consensus.
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