What's Happening?
The GST Council has announced a significant reduction in tax rates for processed food items, aiming to simplify the tax structure and support the agricultural sector. Previously taxed at 18%, items like ice cream, chocolates, and bakery products will now attract either zero or 5% duty. This move is part of a broader effort to streamline taxes and eliminate multiple duties on similar items, such as dairy products and Indian breads. The council's decision is expected to reduce classification disputes and bureaucratic discretion, thereby enhancing the integration of farm produce into the market.
Why It's Important?
The reduction in GST rates is crucial for the agricultural sector, which has struggled with multiple taxes and levies. By lowering these rates, the council aims to encourage value addition and organized processing of raw produce, potentially increasing farmers' income. The simplification of tax rates could also lead to more competitive pricing for consumers, benefiting both producers and buyers. This initiative is expected to stimulate growth in the agricultural industry and improve the overall efficiency of the food supply chain.
