Implementation of the Goods and Services Tax (GST) has not gone well for many rice millers, especially those who produce branded rice in the southern States.
Gummadi Venkateswara Rao, chairman of All India Rice Millers’ Federation, said that earlier, some States had nil tax on rice while some had 5% tax. Under GST, there is no tax on rice and hence, prices have come down in many places.
However, branded rice, which is just 2% to 3 % of the market, attracts a 5% rate. “We have sought bringing branded rice also under 0% GST.”
Similarly, rice bran sold for solvent purposes attracts 5% GST while there is no tax on bran meant for cattle or poultry feed. More than half the volume goes to the feed industry. GST on bran should be removed, he said.
K.S. Jagadeesan, former president of the Tamil Nadu Federation of Rice Mill Owners and Paddy, Rice Dealers’ Association, said southern States are major rice consumers.
Awareness on rice brands had been high in Tamil Nadu and there are more than 100 brands in the State, he said. “It is the Government that supported and encouraged millers in Kangeyam to modernise mills and develop brands. We did that and now branded rice attracts 5%. This increases the cost of rice,” according to Mr. Jagadeesan.
D. Thulasingham, president of the Tamil Nadu federation, added that after implementation of GST, many millers in the State do not use the brand. The federation representatives met State Government officials recently and said the State should appeal to the Centre to remove the GST on branded rice. “The council should at least remove the GST on all non-basmati rice,” he said. Similarly, a rice mill owner supplies bran to a trader and would not know what the bran would be used for. Hence, GST on bran should be removed. Though job work attracts 18%, it would not be applicable for the rice sector. The Government should give a clear notification on this, he said.