The GST (Goods and Services Tax) panel has decided to finalize the classification of millet-based products to regulate the applicable tax rates on them.
As per the sources, a panel of officials from the Center and States would categorize products keeping millet as a main ingredient.
For now, the GST does not have any specific entries for millet-based health mix products. On that account, currently, the GST slab rate that applies to these products is 18 per cent under the residual entry.
The committee will see the percentage of millet and other ingredients in the health mix to define its category, and where it fits the best, said a tax expert.
Currently, a particular millet-based health mix contains a small quantity of flour, groundnut powder, pulses, etc. that are roasted the same way as millets. Some goods, for example, cardamom and pepper, may also be added in small quantities to create a unique flavour. These can be accomplished by combining these products, powdering them, and packaging them for sale.
The GST panel will be expected to present this classification at the next GST Council meeting, expected to happen at the end of May or June.
Major FMCG (fast-moving consumer goods) companies are raiding this segment to encourage millet-based healthy diet alternatives. Apart from this, the Union Government is also promoting millet-based products to support farmers’ income.
An expert said that the prepared food category falls under different classifications, and we should decide where to place millet-based products. Tax rates will apply accordingly.
The agenda was discussed at the previous GST council meeting held in February. In this meeting, they had recommended a rate reduction depending on packaging, which was nil or 5 per cent.
That meeting concluded that no tax be levied if the product contains 70 per cent of millets in the least amount and is sold loose, and 5 per cent packaged or labelled.
However, the matter was postponed by the council for clear consideration. Union Finance Minister Nirmala Sitharaman had said after that council that “no conclusion has been made yet on the levy of millets and the percentage of millets in the ready food category has already been discussed”.
Important: GST Rate on Millet-based Products May Get Reduced to 5% or NIL
Firms had requested to consider these products on the level of Sattu, which is a mixture made out of ground peas, beans, lentils, and other flours.
Millets were the main focus of Union Finance Minister Nirmala Sitharaman’s budget speech. India is the world’s largest producer and second-largest exporter of millets, and she wants to make the country the hub for this highly nutritious grain.
