Companies make over 25 kg packs to avoid 5% GST

Companies selling branded rice, wheat flour, or atta, and pulses have started making heavier packets to avoid 5% GST on pre-packaged, pre-labelled food up to 25 kg. These packets are primarily meant for kirana stores from where consumers buy the commodities in the loose form, for which no GST is levied.

The CBIC on Sunday clarified that pre-packaged food items weighing more than 25 kg in a single packet would be exempted from GST. The 5% levy on smaller packets came into effect Monday.

"Grain and pulses manufacturers can now produce single packets above 25 kg and sell to the kirana stores. The kirana store owner can just tear the packet and sell to the consumers according to their requirement. The consumers will not have to pay the GST," Bimal Kothari, chairman of Indian Pulses and Grains Association, told ET.