As the Goods and Services Tax (GST) on several items, especially pre-packaged food, came into force on Monday, the Opposition Congress and the Janata Dal (Secular) attacked the Bharatiya Janata Party for causing distress among the poor and middle class who are already affected by rising prices.
The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) too expressed feared that the household budget on groceries would go up. The FKCCI has said that though GST is not being levied on wholesale packaging, 5% on pre-packed and labelled food items sold in retail is going to cost the ordinary families dear.
Gold and foodgrains
“We do not understand why gold that is not an essential commodity is taxed at 3% and foodgrains is being taxed at 5%. In most urban centres, nearly 80% of the food products that are sold is pre-packed, so most household expenses on groceries will straight away rise by 5%. Across the country, an estimated 50% of food products are pre-packed and labelled,” said FKCCI Vice-President Ramesh Chandra Lahoti, adding that the traders will pass on the hike to the consumer. He urged that exemption on food products should be continued especially at a time when inflation is high worldwide and the country is coming out of the pandemic shadow.
The hotel industry also expressed unhappiness as even the budget hotel rooms are brought under the 12% GST rate bracket, and comes at a time when business is picking up. This along with the GST on pre-packed food products will affect business, the industry claimed.
Meanwhile, as the new rates came into force on Monday, two former Chief Ministers Siddaramaiah and H.D. Kumaraswamy asked if this was ‘Ache Din’ promised by the Prime Minister Narendra Modi.
‘Tax terrorism’
Terming the development as “tax terrorism”, Mr. Siddaramaiah said that the tax on pre-packed labelled food products shows that the Centre buckled under the pressure of companies that sell branded products, and will not only affect families suffering from price rise but also thousands of micro enterprises, calling it “snatching food from the plates of the poor.”
The Leader of the Opposition told presspersons that while essential commodities used by the poor and middle class is being taxed, the corporate tax has been lowered from 30% to 22%.
KPCCC president D.K. Shivakumar called it “gift to people after eight years of Prime Minister Narendra Modi’s rule.” On the one hand, income of people has not increased and on the other, prices of essential commodities have risen, he pointed out.
Double whammy
JD(S) leader Mr. Kumaraswamy said that the anti-poor decision of the Union government was robbing poor people of their food by rising taxes and prices. “Thousands of families are already on streets due to COVID-19 pandemic. This decision of imposing GST on food products has to be reviewed,” he said.
However, former Minister and senior BJP leader K.S. Eshwarappa defended the hike and said that due to circumstances, the GST had become “inevitable.”
