Exempt food items with registered trademark from GST: CAIT

Traders' body CAIT today urged the government to exempt food items, branded as well as non- branded, having a registered trademark from the GST.

The traders' body argued that the distinction made by the GST council by levying 5 per cent on branded items having a registered trademark will encourage adulteration and lead to less remunerative prices to farmers even for good quality produce.

In a letter to Finance Minister Arun Jaitley, the Confederation of All India Traders (CAIT) said: "Under the pretext of 'branded' products, these items have been made taxable at 5 per cent which will prove to be detrimental and in contradiction of the intention of the government."
 

CAIT said that small manufacturers of food grain, pulses and other agro commodities have obtained registered trademark in large numbers across the country purely to comply with the standards prescribed by Food Safety and Standards Act.

"About 50 corporate houses are producing these items aggregating to nearly 15 per cent of the total market under their respective registered brand name whereas rest of the 85 per cent is being produced by SMEs out of which about 40 per cent SMEs are conducting their business operations with registered trade mark," it said.

This analysis amply reflects the fact that about more than 50 per cent of food grain, pulses and other agro commodities will fall under 5 per cent tax slab much against the intention of the government, it added.