Will 5 percent GST on rice be abolished?

Among the states in India, Tamil Nadu is the state that eats rice as the major staple food. It is Tamil Nadu that has taken pride in providing free rice.

The Union government has so far levied tax only on high quality rice varieties including India Gate, which can be called a trade mark. In the 47th GST Council meeeting, 5 percent tax was imposed on essential commodities including rice. There is no GST tax on rice bags with a total weight of more than 26 kg. They have declared tax if less than 25 kg of rice is sold.

In the past, small farmers produced small quantities of paddy and brought 10 bundles, 20 bundles up to 100 bundles to the rice mill and converted it into rice and sold it easily. But this GST taxation has created a practical problem for the small farmers to bring paddy bundles to the rice mill.

When there was no tax on essential food items, due to this 5 percent GST taxation by the Union Government, the poor and simple people are unable to buy rice in retail sales of 1 kg, 5 kg, 10 kg. Also, all the essential food items are sold in packets. Similarly, most traders are selling rice in bags.

5% GST has to be paid on retail purchases of up to 25 kg of rice. Therefore, since there is no GST tax above 25 kg, the owners of rice mills are working to sell an additional kg of rice in bundles of 26 kg.
Most people use lean rice varieties. As a result, Tamil Nadu is buying and using rice varieties from neighboring states like Andhra Pradesh and Karnataka. They purchase up to 3 thousand tons of paddy per day and sell it in rice mills. It is in that survival that the soil has fallen now.

Therefore, the demand of rice traders, rice mill owners and the poor and the common people to immediately cancel the 5 percent GST levy on rice, which is the staple food of the people, has emerged as a demand. Accepting this reasonable demand, there is an expectation that the GST Council on August 28 will announce the cancellation of tax on rice.

Every month GST tax collection is said to be a record. Let this feat continue without depriving the poor. That would be the real achievement.

Union Finance Minister Nirmala Sitharaman should abolish the 5 percent tax on rice altogether. Will she?