Food grain may be brought under GST, tax mechanism likely to be rejigged

Items such as food grain, which earlier attracted purchase tax under the value added tax (VAT) regime, may now be brought under the goods and services tax (GST) net. 

The officers’ committee on revenue augmentation is examining the feasibility of imposing GST on such products on the basis of reverse charge mechanism. Through this route, registered entities can pay GST on behalf of unregistered players.

“The idea was to go with the revenue neutrality principle in GST. However, now after so much of rate reduction in GST, there’s a situation where GST rate is lower than the rate in the pre-GST regime.