TN: Opposition to GST on Food Products Rises, DMK Accused of Doublespeak

The decision of the 47th Goods and Services Tax (GST) council to impose and revise the GST on several products has invited the wrath of stakeholders. In Tamil Nadu, the Vanigal Sangankalin Peramaippu (Tamil Nadu Traders Association), one of the biggest trade associations in the state, held a protest on July 22 in Chennai demanding the withdrawal of the imposed GST.

While the traders have opposed the imposition of 5% GST on packed food items, the scientific community has objected to the withdrawal of exemption for scientific equipment. 

As the revised prices were announced on several products, both the state and Union governments have been accused of fuelling the already spiralling prices of essentials goods.

The price rise in milk and milk products sold by the state-run Aavin is higher than the GST imposed by the Union government. Another concern raised by the traders' body during their protest is the imposition of 1% cess by the state government on agricultural products.

The imposition of taxes and cess, by both state and Union governments, squeezes the common public, forcing them to spend more on food and other essential commodities, they said. 

PROTEST AGAINST GST ON FOOD PRODUCTS

The 5% GST imposed on packaged and unbranded food products will affect both the traders and consumers. All the food items should be packed as per the Food Safety and Standards Authority of India (FSSAI) Act, 2006. 

The Vanigar Sangankalin Peramaippu held the protest in Chennai seeking the withdrawal of GST on food products citing the adverse impact on the small traders and manufacturers. 

A M Vikramaraja, president of the traders union said, “The Union government must immediately withdraw the GST imposed on packaged and unbranded food products. All sections of the population, including daily wage workers, will be affected by the increase in price due to the imposition of GST.”

GST on rice led to a massive strike by the rice mill owners across the state on July 16. According to the office bearers of the rice mill owners’ association, the cost of rice would increase by Rs 60 per bag of 25 kg. 

Meanwhile. the Communist Party of India (Marxist) [CPI(M)] has announced a state-wide demonstration against the decision to levy 5% GST on rice and other cereals. 

PRICE HIKE OF MILK PRODUCTS

Though the price of milk and milk products was expected to increase as a result of the GST imposed, the state government is accused of fixing even higher prices. The Aavin milk cooperative federation has increased the prices of different products by 10-15%.

The Vanigar Sangankalin Peramaippu sought GST exemption for milk and milk products and announced that the association will hold a series of protests against the decision of the Union government.

K E Raghunathan, convenor of the Consortium of Indian Associations (CIA) flayed the additional hike in the prices. “The cost of one variety of curd has been increased from Rs 15 to Rs 18. This is more than the 5% GST imposed. The state government has put an additional burden on the consumers,” he told Newsclick.

Image: Cost of products of Aavin after the imposition of 5% GST 

Political parties and milk agents have condemned the price hike while the state government was raising concerns over the 5% GST.

The Tamil Nadu Milk Agents and Labourers Welfare Association has accused the Aavin management of continuously increasing the prices of products while the procurement prices have remained unchanged. 

CONFUSION OVER CONSENSUS ON GST

The government of Tamil Nadu has been vociferous against the GST regime and has opposed the unilateral decisions of the GST council, even though the Union finance minister has claimed to have arrived at a consensus on levying GST on food products. 

Union finance minister Nirmala Sitaraman had claimed that GST on packaged food products was necessary to check evasion. However, the Tamil Nadu finance minister took an exception, claiming that the government wrote to the GST council in June. 

“The state government would not accept tax proposals on food items like rice, curd, buttermilk and jaggery as it would affect ordinary people,” the minister had earlier said. 

Nonetheless, the steep hike in milk products of Aavin has not truly reflected the statements of the state government against GST on food products. "The state government after opposing 5% GST has hiked the prices by 20% with immediate effect,” Raghunathan said. 

The principal opposition party, the All India Anna Dravida Munnetra Kazhagam (AIADMK), demanded the state government roll back the price rise and urged it to exert pressure on the GST council while; at the same time, the AIADMK chose not to criticise the BJP government at the Centre.