In an innovative way of circumventing the 5% Goods and Services Tax (GST) on pre-packed and pre-labelled food items below 25 kg, such as rice, milk and pulses, the rice mills in Tiruppur district have increased the minimum packaging of rice bag by a kg and selling it as 26 kg bags.
K.C.M Duraisamy, vice president of the Federation of Tamil Nadu Rice Mill Owners’ and Dealers’ Association, said as many as 200 rice mills functioning across the district, that supply rice to more than 500 shops have decided to increase the packaging by a kilogram from the earlier 25 kg to avoid GST.
By imposing GST on food products for day-to-day consumption, the government has increased the burden and discomfort for lower income groups, mainly the daily wage earners, since there exists a slow-down in the garment industry because of the increase in yarn prices, said a retail rice trader from Tiruppur.
Rice dealers in different parts of the Tamil Nadu and neighbouring states such as Andhra Pradesh and Karnataka have also changed the method of packaging to 26 kg. This would benefit the consumers, as earlier they were getting 25 kg rice bag for ₹1,000, With 5 % GST the same quantity would cost ₹1,050. Now by increasing the pack to 26 kg, we were able to provide one kg extra for the ₹ 1,050 without GST, he added.