MC Exclusive: No GST likely on millet flour preparations

The present GST rate on millet flour food preparation is 18 percent

The Goods and Services Tax Council, the joint forum of the Centre and states, is likely to exempt millet flour food preparations from GST by slashing the current 18 percent levy to nil, sources have told Moneycontrol.

The Centre has been encouraging the consumption of millets, as the traditional grains are not only nutritious but are also climate resilient — they need less water and chemicals to grow.

“Food preparation of millet flour in powder form, containing at least 70 percent millets by weight, is likely to attract nil GST if sold in other than pre-packaged and labelled form,” one of the sources said.

The source said the proposal would be discussed when the GST Council meets on October 7.

The proposal was discussed at the 49th and 50th GST Council meetings but was deferred for further examination. The GST Council, which is the governing body of GST, has 33 members, of which two are from the centre and 31 from states and union territories.

If the food preparation is pre-packaged and labelled, the GST rate would likely be lowered to 12 percent from 18 percent, the sources said.

The decision will cover food preparations with millet flour as the base. These preparations should derive their essential character from such materials whether or not these ingredients predominate by weight or volume.

“Since 2023 is being celebrated as the Year of the Millets, to promote millet-based products, the GST Fitment Committee has recommended reducing the rates,” the source said.

While millets undergo multiple stages of preparation, including washing, roasting, grinding, addition of additives and other substances such as pulses, the final products are food preparations of flour.