Small shops need not collect 5% GST on essential items in small packs: FM K N Balagopal

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Kerala finance minister K N Balagopal | Photo: Mathrubhumi

Thiruvananthapuram: Finance Minister K N Balagopal on Wednesday said small unregistered shops or those with an annual turnover of around Rs 1.5 crore are not required to collect 5 per cent GST on essential commodities sold in loose or in small packages of 1 or 2 kg.

This is what he and Chief Minister Pinarayi Vijayan meant when they said that 5 per cent Goods and Services Tax (GST) would not be levied on small-scale stores or small unbranded packages of rice and atta, among others, said the State Finance Minister while speaking to reporters here.

He reiterated that the Kerala government does not intend to tax items sold by entities like Kudumbashree, or small stores in 1 or 2 kg packets.

Kerala government's Kudumbashree, a women self-help group, is considered one of the largest women empowerment projects in the country.

Besides the GST issue, the State Finance Minister also spoke about the Cabinet decision taken today to restructure or re-organise the GST Department here.

As part of the restructuring, there would be three main sections in the GST Department -- Taxpayer Services Division, Audit Division and Intelligence and Enforcement Division -- and 140 audit teams would also be appointed in the seven zones.

Besides that, news posts have been created, some have been upgraded and some renamed, he said during the press conference.

On the 5 per cent GST, Balagopal had earlier, in the State Assembly, said the branded companies have to pay a tax of 5 per cent on packaged products, but if they mention in the packaging that they are not "claiming the brand" then it is not taxed.

"So they (Centre) have brought in the rule to catch such companies... but there is still some confusion prevailing over this," he had said then.

He reiterated that during his press conference today.

Kerala Chief Minister Pinarayi Vijayan had on Tuesday said the State government would not be levying 5 per cent GST on essential commodities which are sold in loose or unbranded packages.

He had also said that the Kerala government's stand against the same has been conveyed to the Centre.

The Chief Minister had recently sought an urgent intervention of Prime Minister Narendra Modi on the issue of the imposition of GST on essential commodities, arguing the move would affect the common people.

Vijayan, in a letter to the Prime Minister, had pointed out that many small shopkeepers and millers pre-pack and keep the items ready for sale so that the customers can readily purchase them off the shelf rather than spend time getting the items weighed and packed.

In the letter, Vijayan had said such pre-packing is a common practice in most of the retail shops in Kerala and the present change would have an adverse impact on the large number of ordinary customers who frequent these shops for their essential purchases. PTI

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