Tuesday, August 2, 2022

'VAT' on lassi, curd, buttermilk, paneer before 'GST'; Sitharaman's response to opposition's charge of inflation

New Delhi : Even before the implementation of Goods and Services Tax (GST), food was subject to value added tax. Union Finance Minister Nirmala Sitharaman refuted the opposition’s allegations that the poor are facing inflation due to the five percent GST, giving the statistics that branded lassi, curd, buttermilk, paneer in airtight packets were being charged 6 percent ‘VAT’.

The decision to implement GST on branded and packaged food was unanimously taken by the GST Council. No state finance minister had opposed the proposal. Fauzia Khan of NCP had raised the issue that the then Maha Vikas Aghadi government of Maharashtra had given a letter to the council as opposed to the proposal to implement ‘GST’ on food grains. However, no state had officially opposed it in the ‘GST Council’, argued Sitharaman while replying to the debate on inflation in the Rajya Sabha on Tuesday.

Since 2019, the GST Council was discussing the implementation of ‘GST’ on packaged and branded goods. The mismanagement of ‘GST’ exemption on goods of branded but unregistered companies has been rectified. So now ‘GST’ is levied on branded goods. GST is not applicable on free food. She said that the poor will not have to bear the burden of ‘GST’ as no tax will be collected on free food items like milk, curd, paneer etc. The country’s economy will not collapse like Sri Lanka, Bangladesh or Pakistan. Bangladesh has requested a loan of 4.5 billion dollars, Sri Lanka 3.5 billion dollars, Pakistan 7 billion dollars from the International Monetary Fund. Sitharaman also said that India does not need to borrow from international organizations.

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