Political News

Grain traders shut shop, protest against imposition of GST

Dated 16th June, 2017

Grain traders shut shop, protest against imposition of GSTTraders of grains and staple foods across major Indian markets went on a strike on Thursday, protesting the imposition of goods and services tax (GST) on branded rice and lentils. Traders of sugar, of which the country is the world’s biggest consumer, also shut their shops after New Delhi had said the sweetener would attract a 5% levy.

Trade associations from Maharashtra, the Delhi Grain Merchants Association, and the Bombay Sugar Merchants Association led the strike against what they claimed as the first instance of taxation of staple foods since Independence. The GST, which replaces multiple producer levies with just one tax, is scheduled to be implemented July 1.

Grain traders from Delhi’s Naya Bazar market, which sees a daily turnover of about Rs 50 crore, shut shop on Thursday. "For the first time since Independence, a government has taxed daal and roti,” said Rattan Lal Navetia, general secretary of the Delhi Grain Merchants Association. “The government has not only imposed tax, but it has also made it complicated for the traders. From filing four income tax returns in a year, we will now have to file 37.”

Traders claim that brands, howsoever small, dominate the wholesale trade now, as increased awareness has tilted the scale in favour of packaged goods. According to them, just cleaned and packed grains that carry some brand name are not highly processed — and, therefore, shouldn’t attract GST.

The Confederation of All India Traders (CAIT), which claims to represent 60 million traders in the country, did not participate in the strike, but supported the demands of those that downed shutters Thursday. Praveen Khandelwal, secretary general of CAIT, said: “If a section of traders are observing astrike, they must have some genuine concerns… There needs to be clarity on what a brand is."

Praveen Chorbole, president of the Poona Merchants Chamber, said Maharashtra traders participated in the strike. “There is no tax on traders who buy directly from farmers. However, for packed and branded grains, tax has been introduced.’’ Separately, the Bombay Sugar Merchants' Association participated in the agitation. "Apart from the one-time fixed tariff of Rs 71 per quintal charged at the mill gates as excise duty, sugar has by far never been brought under taxes," a press release from the association mentioned.

Sugar traders have expressed concern that they may have to take the liability of the pre-seller defaulting on the payment of GST.

“A sizeable number of mills have defaulted in settling dues to cane farmers, banks, co-operative societies etc. Any default in making GST payment by the millers that presently sell sugar on 100% cash payments to buyers, will adversely affect the traders who have purchased the stock during the period," according to the statement.

Source: The Economic Times