Ministry planning to exempt perishable agri products from GST: Harsimrat Kaur Badal

Sai Nikesh D | The Dollar Business Harsimrat Kaur Badal, Minister of Food Processing Industries, India, has assured the food industry that the agri and food sectors would have a minimal impact of the Goods and Service Tax (GST) when it is rolled out in next year and the Ministry would try to keep perishable agri products outside the purview of GST. Badal informed about the Ministry’s plans to Alok B. Shriram, President, PHD Chamber, when he led a delegation, consisting of its Senior Vice-President, Vice-President and Executive Director Mahesh Gupta, Gopal S Jiwarajka and Saurabh Sanyal, among others at her office in New Delhi yesterday. GST is an all-encompassing tax that will absorb central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD). At the State level, it will absorb taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax. Badal has also indicated that the government is likely to extend preferred policy options for the food and food processing sector including agri business, so that this sector can be brought on an exclusive path of growth and to make sure that all stakeholders in it benefit in an equitable manner. Shriram urged the government to evolve policies so that farm produce is effectively channelised to consumers with little losses, as currently the post crops losses are enormous in the absence of adequate infrastructure. According to official data, wastage of perishable products in India is as high as 18% mainly due to lack of storage, processing facilities and transport. An exemption of GST on food products can help India’s food industry become competitive in the world market and consolidate India’s position as a leading agri-exporter in coming years. On the issue of GST, the Chamber said that the government must implement it by April 2016 and has also requested that fair and effective food standards be evolved to improve the quality and exports of food products. India’s exports of processed food in FY2013-14 stood at around $37.79 billion, which was around 12% of India’s total exports in the year.  

 This article was published on January 10, 2015.