{"id":38403,"date":"2021-12-04T11:19:40","date_gmt":"2021-12-04T05:49:40","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=38403"},"modified":"2021-12-04T11:19:42","modified_gmt":"2021-12-04T05:49:42","slug":"government-should-bring-down-and-reconcile-gst-rates-on-food-processing-industry","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/government-should-bring-down-and-reconcile-gst-rates-on-food-processing-industry\/","title":{"rendered":"Government should bring down and reconcile GST Rates on  Food Processing Industry"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In India, The Food Processing sector has an exemplary role in connecting Indian farmers to consumers in both (national and international) markets. The primary food processing industrial sectors in India are grains, sugar, edible oils, beverages, and dairy products. Recently, the Government has increased the GST rates on Food processing industry. In this blog, we will discuss why the Government should bring down and reconcile the food industry.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/government-should-bring-down-and-reconcile-gst-rates-on-food-processing-industry\/#Facts_related_to_GST_rates_on_Food_Processing_Industry\" >Facts related to GST\nrates on Food Processing Industry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/government-should-bring-down-and-reconcile-gst-rates-on-food-processing-industry\/#The_decision_by_the_Government_to_increase_the_GST_rates_on_Food_Processing_Industry\" >The decision by the Government to increase the GST rates on Food Processing Industry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/government-should-bring-down-and-reconcile-gst-rates-on-food-processing-industry\/#Why_should_the_Government_bring_down_and_reconcile_GST_rates_on_the_Food_processing_industry\" >Why should the\nGovernment bring down and reconcile GST rates on the Food processing industry?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/government-should-bring-down-and-reconcile-gst-rates-on-food-processing-industry\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Facts_related_to_GST_rates_on_Food_Processing_Industry\"><\/span>Facts related to GST\nrates on Food Processing Industry<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Around 74 % of countries have nil Goods and Service Tax rate on\nfoods, and in most countries, the maximum GST rate on food is 10 % or less. In\nall the developing nations, food products are kept at lower tax rates to ensure\nthat the products are economical.<\/p>\n\n\n\n<p>Now, the food processing industry has become more attractive for international players due to its large agricultural base, huge livestock, and cost determination. Also, the market size of the industry is 32 % of India\u2019s food market. As a result, the It has a notable investment in fixed capital, growing year after year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_decision_by_the_Government_to_increase_the_GST_rates_on_Food_Processing_Industry\"><\/span>The decision by the Government to increase the GST rates on Food Processing Industry<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Recently, the Government has increased the GST rates on branded\nand packaged foods products such as potato chips, snacks food, cereals, namkeen\nfalls into 12 % slab rate, while unbranded namkeens, chips, and snacks fall\nunder a 5 % slab rate. This deviation has been increasing complications for the\nindustry and inspiring the production of unreliable &amp; unhealthy products.\nIt is further observed that a move of consumption from branded to non-branded\nfoods reduces Government revenue and proves inefficient.<\/p>\n\n\n\n<p>The food processing industry, one of the most critical sectors\nin India, having a current aggregate output of around $158.69 billion, is\nstruggling hard to operate considering the underline economic condition, the\nunpredictability of input supplies after the COVID-19 pandemic.<\/p>\n\n\n\n<p>The high GST rate of 18% on online food delivery service\nproviders and incompetent credit of such GST charged to the food sector hurt\nthe growth of the food processing sector. Reduced GST rates will keep the cost\nof food at affordable rates and create more employment in the industry while\npromoting the initiatives taken by the Government.<\/p>\n\n\n\n<p>The Food processing industry links agriculture and food consumption, and its performance has had a socio-economic impact resulting in price inflation issues. The decision by the Government to increase the GST rates in the Food processing has impacted the food ecosystem.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_should_the_Government_bring_down_and_reconcile_GST_rates_on_the_Food_processing_industry\"><\/span>Why should the\nGovernment bring down and reconcile GST rates on the Food processing industry?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In such challenging times, the government needs to provide the\nrequired support to the Food Processing industry by introducing GST rate\nRationalization measures in line with the previous requests made by the\nindustry.<\/p>\n\n\n\n<p>For the same, the Government should bring down the GST rates\napplicable to the food processing industry and reconcile the rates applicable\nbetween packaged branded and non-branded products in the food segment.<\/p>\n\n\n\n<p>As per the industrial understanding, to streamline the GST rate\nstructure, the Government is currently working on GST rate rationalization for\ncombining two GST rate tariffs.<\/p>\n\n\n\n<p>Also, countries like Australia, <em><strong>Malaysia<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Malaysia\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>, Canada, and Thailand have nil duty on food products. In contrast, countries like Germany, Italy, France, and Switzerland have notably reduced tax rates for the Food packaged industry covering between 2.5 to 7 %. This tax rationalization by the Government to reduce the GST rate on Food packaged Industry will further increase the tax collection.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Pandemic has turned the public eye on packaged food consumption in India, as consumers stay at home owing to the pandemic bought more essentials and ready-to-cook items benefiting companies. The Government decided to increase the GST Rates on Food processing Industry has affected the infrastructure of the Food Processing Industry. Now, the Government should rationalize the rates applicable between packaged and unpackaged food products to maintain transparent working.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/how-to-set-up-a-food-business-in-india\/\">How to set up a Food Business in India <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In India, The Food Processing sector has an exemplary role in connecting Indian farmers to consumers in both (national and international) markets. The primary food processing industrial sectors in India are grains, sugar, edible oils, beverages, and dairy products. Recently, the Government has increased the GST rates on Food processing industry. In this blog, we [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":38436,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[150],"tags":[567],"acf":{"service_id":"318"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":4087,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38403"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=38403"}],"version-history":[{"count":43,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38403\/revisions"}],"predecessor-version":[{"id":38449,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38403\/revisions\/38449"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/38436"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=38403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=38403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=38403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}