Pratyush wrote: ↑Mon May 21, 2018 10:52 am
You don't, the GST applies to packed food item's only. If you are buying loose atta dal and rice. No GST applies. But if you buy packaged atta dal and rice. The GST applies. That's the law. You can see how it can be used by rumour mongers against GST.
To the best of my information, GST does very much apply on UNBRANDED unpackaged lose ghee , butter, masala and many food items, though NOT unbranded atta.
So say a person buys milk of say Rs 15 lakhs and uses fuel, and makes and sells UNBRANDED butter/ghee of say Rs 20,00,001 per year for two years. Then he has to pay GST on Re 1 in first year. But next year, he has to pay GST on ENTIRE Rs 20,00,001 . The GST rate will be 2% or 5% depending on whether he takes composite or regular scheme. And if he sells UNBRANDED ghee/butter of over Rs 1 crore, then GST will be 5%. Pls ask CA for more details.
Now Rs 1 crore may sound like big amount, but actual profit on Rs 1 crore of ghee manufacturing and sale is not more than Rs 5 lakhs. And most inputs like milk, fuel, labor have no GST and so input credit is zero. Transport is another cost but GST on that cant be claimed as input credit !! And so GST payable on manufacturing and sale on UNBRANDED ghee of Rs 1 crore will be Rs 5 lakhs , which can be more than TOTAL profits he earns !!! So in many cases, a person is paying more GST than he earns !! Now all GST-apologists claim that taxes are paid by buyers and not sellers. I wont argue against their sophistry.
Now of course, the seller/manufacturer can hide sales, split sales into two companies and they he can get slaughtered when inquiry comes.
Till GST came, excise etc on UNBRANDED ghee and many unbranded items was zero. But GST has taxed many UNBRANDED lose (not all, but many) food items as well.
Now, can some BRFites rise and get exact answer from CAs on whether some UNBRANDED food items are taxed or all unbranded are tax free?
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