Tamil Nadu has sought all food items, whether branded or not, to be nil-rated in the new Goods and Services Tax (GST) regime.
It demanded lower tax for Tamil films, non-air-conditioning restaurants among others at the GST Council meeting chaired by Union Finance Minister Arun Jaitley on Saturday.
Addressing the GST council meeting, State Finance Minister D. Jayakumar said that cereals like rice, wheat and barley have been exempted as per the unanimous decision of the Council.
However, the same items sold in unit containers and bearing a registered brand name have been brought under the 5% category.
“We would reiterate that all food items whether branded or not should be nil rated. Atta, maida, besan and other flours may also be treated similarly,” Mr. Jayakumar said.
Mr. Jayakumar pitched for lower taxes on a slew of other items and said the request was keeping in mind the interests of the common man.
He said the rate of tax for supply of food and drinks in restaurants without air-conditioning had been proposed at 12%. “This will affect the common man as the non air-conditioned restaurants including ‘Amma Canteens’, suffer a higher rate of tax. This should be brought down to 5%.”
The Finance Minister called for a distinction between AC restaurants serving liquor, which have special licence and other AC restaurants that do not serve liquor. The ordinary AC restaurants that do not serve liquor should be taxed at 12% instead of 18%, he said.
Entertainment tax
“Tamil Nadu has been exempting films made in the local language from the purview of Entertainment Tax. The levy of tax at 28% on all films will adversely impact the film industry in the State. Hence, we urge that films made in the local language of the State should be subject to a lower rate of tax,” he said.
On Friday, Tamil film industry had said putting regional films at higher tax rates was unfair.
Mr. Jayakumar urged that water sold in refill cans (bubble top) and small plastic pouches should be distinguished from water sold in bottles and sought the former two categories might be exempted or taxed at lower rate of 5% as it is consumed by the lower strata of society as an essential commodity.
The Minister said that wet grinder manufactured in Coimbatore was a product with GI tag and 98% of it was produced in small, medium and micro enterprises sector and was not taxed under Central excise.
The rate on this product should be taxed at 18% instead of proposed 28%, he said.
Luxury items
Only motorcycles above 500 cc should be considered luxury items and levied a cess instead of the proposal to include 350 cc bikes. He suggested that construction material like concrete blocks/bricks may be taxed at a lower rate instead of 28% and it should 5% on fly ash bricks.
The Minister said he pitched for lower tax on certain aspects of textile industry and footwear.
