The India Pulses and Grains Association (IPGA) has urged the government to reinstate the GST exemption for pre-packaged and pre-labeled agricultural products. The trade body has also expressed concern about trader apprehension, the negative impact on farmers' and consumers' interests, and believes that levying GST will raise domestic pulse prices even further.
"With regard to the levy of 5% GST on pre-packaged and pre-labeled Agri products based on the recommendations given by the GST Council, IPGA is not in agreement with the government on this specific policy," said Bimal Kothari, Chairman of IPGA.
"This notification issued by the Ministry of Finance is not in favour of both farmers and end consumers," Kothari added. “It will harm domestic trade, which is already being harmed by the pandemic and other market conditions."
Furthermore, Kothari stated that the IPGA would lobby various ministries and government agencies to reinstate the exemption from GST on pre-packaged and pre-labeled agricultural products.
"We would like to draw the government's attention to the impact on trade, which is currently hesitant to operate in the domestic market." India is on its way to becoming self-sufficient in pulses, and such policies will act as speed bumps on the road to growth and progress.
“This contradicts the government's stated goal of doubling farmers' income and achieving self-sufficiency in agriculture," Kothari said in a statement.
Furthermore, the IPGA stated that the definition of pre-packaging and pre-labelling in the Legal Metrology Act and the recent notification issued by the Finance Ministry are ambiguous.
"IPGA is in the process of consulting legal experts for their opinion on the aforementioned GST levy, following which we will make our recommendations to the Finance Ministry and other concerned authorities," he said.
With festival season approaching and the monsoon still settling, IPGA anticipates further pulse shortages in the coming crop year and believes that as the trade's apex body, it is IPGA's responsibility to bring this to the government's attention well in advance. As a result, any such move will exacerbate the sector's decline, according to Kothari.
