The Department of food and public distribution pitching to levy 5% GST on de-oiled rice bran.
Presently, 5% of GST is applicable on rice bran (before oil extraction) and raw rice bran oil but de-oiled rice bran does not have any GST.
Department of food and public distribution secretary, Sudhanshu Pandey in a letter to revenue secretary Ajay Bhushan Pandey has called for an urgent imposition of 5 percent GST on de-oiled rice bran.
“Department is striving to increase domestic production of edible oils and thereby reduce our dependence on imports which is 60 percent of the total consumption. In order to increase domestic production of edible oils, it was felt that ways of increasing the domestic production of rice bran oil in the country, which is now only 60 percent of its potential, be explored. Taking this forward, the committee of secretaries (CoS) in its meeting held on January 28, 2021 recommended that the production of rice bran oil may be increased in the country for domestic use and the same may be promoted extensively as a healthy medium of cooking,” the letter said.
The rationale explained by the food ministry is that currently, “Rice bran is sold directly to animal feed producers directly from the unorganised market or billed as de-oiled rice bran, so as to avail nil GST. Rice bran and de-oiled rice bran are similar in appearance and cannot be differentiated.
This results in less availability of rice bran for oil extraction 5% GST may be imposed on de-oiled rice bran so as to level the playing field and dis-incentivize the sale of rice bran directly to feed manufacturers as de-oiled rice bran, thereby increasing the availability of rice bran for oil extraction. lt will also prevent loss to the exchequer on account of the sale of rice bran as de-oiled rice bran by unscrupulous traders. It will also be beneficial to the oil extraction units in the form of input GST offset on rice bran oil.
However, it is noteworthy that any decision in respect of GST rates, whether to levy or to reduce taxes or to even introduce a new item under the GST ambit is not taken by the finance ministry, but such a decision is taken by the GST Council, which is the governing body including finance ministers of states and Centre.
Support our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in
