"The government has demonstrated its intent to target malnutrition through the recently released National Nutrition Strategy, being steered by the Niti Aayog.
"Hence, any high rate of taxation runs contrary to the stated public policy objectives of your government besides making it unaffordable and hurts the business of the trading community," CAIT said in a letter to the prime minister, pleading with him to correct the anomaly at the earliest.
"Therefore, in a country which has malnutrition as a major scourge, these are powerful arguments which hopefully Sir, you would take on board and ensure their affordability through the application of lower GST slabs," CAIT said while addressing the Prime Minister in the letter.
Also Read
In the letter, the traders' body also drew the prime minister's attention to findings of a chief economic advisor- led study conducted recently before the implementation of GST.
"The study which had deliberated on the revenue neutral rate for GST strongly recommended keeping essential food items out of its ambit. The report goes so far as to say that food such as cereals, pulses, edible oils and vegetables should be construed as merit items and should be either exempt or should be taxed at concessional and lower rates," CAIT said.
"From a technical point of view there seems to be a roadblock which am sure the GST Council will do well to revisit and address. The issue stems from the fact that at present there is no specific HSN code for cereal and malt based health food drinks which are as of now classified under 1909 10 10 to be taxed at 28 per cent," CAIT said.
The traders' body contended that there is a merit in expanding the 1901 10 definition to accommodate items such as 'health food drinks' to be marked out for a lower rate of taxation.
Disclaimer: No Business Standard Journalist was involved in creation of this content