GST rate hike: Nirmala Sitharaman hits out at opposition, says 'such things happened earlier as well'

Following the backlash from various quarters over hike in GST rates on pre-packaged food items, Union Finance Minister Nirmala Sitharaman on Tuesday sought to allay the misconceptions saying "such things happened before as well".

Sitharaman clarified that the GST has only been imposed on branded and packaged goods and food items, adding that the hiked rate will be levied on items of the same category which are sold loosely.

"It has been prescribed that GST on these goods shall apply when supplied in 'pre-packaged and labelled' commodities attracting the provisions of Legal Metrology Act," she tweeted. 

She further said that the decision taken to impose GST on pre-packaged food was unanimous at the 47th GST meeting held in Chandigarh on June 28.

It must also be noted that items specified below in the list, when sold loose, and not pre-packed or pre-labeled, will not attract any GST. (10/14) pic.twitter.com/NM69RbU13I

— Nirmala Sitharaman (@nsitharaman) July 19, 2022

Responding to the opposition's criticism, she said, "All states, including non-BJP states (Punjab, Chhattisgarh, Rajasthan, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, Kerala) agreed with the decision. This decision of the GST Council is yet again by consensus."

The GoM that recommended these changes in GST rate, she noted, was composed of members from West Bengal, Rajasthan, Kerala, Uttar Pradesh, Goa and Bihar and was headed by Karnataka Chief Minister Basavaraj Bommai. 

She said that the decision was taken to curb the tax-leakage. Also, "it was considered at various levels including by officers, the Group of Ministers, and was finally recommended by the GST Council with the complete consensus of all members".

Sitharaman also said that this is not the first time when food articles are being taxed. 

"States were collecting significant revenue from foodgrain in the pre-GST regime. Punjab alone collected more Rs 2,000 crore on food grain by way of purchase tax. UP collected Rs 700 crore," she said.