From July 1, rice to be costlier by Rs 5/kg!
- The New Goods and Services Tax Act to be implemented from next month
- Rice will carry the new tax of 6.50 per cent under the GST
- Branded and packed rice varieties to pinch more
FollowThink twice before inviting guests over an elaborate Biryani dish at home, this year. For, the price of rice will go up by from Rs 3 to Rs 5 per kilogram with the Goods and Services Tax (GST) to be implemented by July 1.
Branded and packed rice varieties are expected to cost more as they are being sold with the new GST cess, 6.50 per cent tax - 5 per cent tax under GST and 1.50 tax under the Karnataka Sales Tax. This will be applied to all varieties of rice, said KG Nagaraj, joint secretary of Karnataka State Rice Millers' Association to Kannada Prabha.
Karnataka along with West Bengal, Andhra Pradesh, Chattisgarh and Punjab are the predominant rice-growing states. Till now, except for the 1.50 per cent sales tax, the state had not imposed any tax. However, with the GST all set to roll out next month, it is sure to pinch customers' pockets.
How does it affect:
Rice millers in the state purchase rice from paddy growers and they sell  the rice under their own brand or trade mark in the market. There are at least 900 varieties of rice in the state of which 500 types are being sold through various brands and other 400 types through trademarks. They carried only 1.50 per cent sales tax, earlier.
At present, Sona Masuri, steamed rice and raw rice is available from Rs 28 to Rs 62 per kg. There are other brands of rice and their price ranges from Rs 52 to Rs 62. The branded or the packed rice costs Rs 80 to Rs 180. Now, with 6.50 per cent of GST, the price of rice will only soar with every KG. This would not only affect the consumers but even farmers will also be severely, impacted. For, the rice millers may not take the price quoted by the farmers while purchasing the rice from them, reports Kannada Prabha.
There are fears that such a price rise may lead to rice hoarding. There are chances that free rice provided by the state government may be sold through the black market. Even rice millers can sell substandard variety of rice through their packaging. The Millers' Associations are expected to meet Finance Minister Arun Jaitley and explain him the impact of GST on rice.
