TN rice mills switch to 26 kg rice bags to avoid 5% GST

COIMBATORE: To circumvent the 5 per cent Goods and Service Tax (GST) on 25 kg rice bags, which would cost an additional Rs 50 and more, rice mills across Tamil Nadu have begun to roll out 26 kg bags.

“After implementation of GST, each 25 kg of rice bag became costlier by Rs 50 to Rs 80 depending upon the quality. With this, each kg of rice gets dearer by Rs 2 to 3. Therefore, to reduce this tax burden on people, rice mills have switched over to 26 kg bags,” said KCM Duraisamy, vice president of Federation of Tamil Nadu Rice Mill Owners and Paddy-Rice Dealers Association.

There are more than 4,000 rice mills across Tamil Nadu with a majority of around 600 mills in Tiruvannamalai, over 125 in Tirupur and 100 in Erode district. They churn out more than 52,500 tonnes of rice on a daily basis.

“Not just in Tamil Nadu, but rice bags supplied from neighbouring states of Karnataka and Andhra Pradesh are now in 26 kg packs. The automated rice mills in the state have also calibrated their machines to load and pack one kg extra,” he added.

As per the Legal Metrology Act, the millers were earlier mandated to sell only 25 kg bags or rather increase the weight in 5 kg. But, these rules have now been relaxed to enable sale in any weight.

Mills across Tamil Nadu halted production for a day on July 16 against the imposition of GST on an essential commodity like rice, which would impact the common people.

“Though increasing the weight by 1 kg for 25 kg bags might have saved some money for consumers, who buy in bulk, many still prefer either 5 kg or 10 kg packs. They are, however, forced to pay extra for the GST. So, our earnest demand to the government is to roll it back,” said R Suresh Kumar, a wholesale rice trader in Coimbatore.