Branded rice goes for a toss

eNarada, Bengaluru, Wednesday, July 12, 2017

For the last few years, many shops in Bengaluru had shifted to selling of branded rice as many brand-conscious customers preferred to buy only the branded ones!

A popular rice dealer in Malleshwaram is busy checking new invoice covering GST. eNarada Picture.

Probably, this is the reason why even some of those who were selling rice (in lose quantity) prefer to register themselves as branded rice distributors.

However, things have seen a drastic change since July 1. The branded rice is suddenly out of stock. With the branded rice attracting a GST of 5 pc (as against zero pc GST for rice), the commuters are staying away from the branded rice products as of now.

During a reality check by eNarada, we found that traders who were selling branded rice are suffering big time. A trader told us, “Earlier, it was a prestige issue to register their brands by the rice mill owners or traders. In fact, the GST tax burden is not just 5 pc GST as they have to pay an additional 1.5 pc of APMC tax for the branded rice there by making the poor man’s food out of reach.” One best example for the lower demands is that a popular brand like ‘Bullet’ too has seen hardly any takers.

However, the traders who have almost emptied their shops from branded rice are facing a new problem. They allege that the department of legal metrology insists on selling branded rice and slaps a fine on those who refuse to sell.

So, the rice merchants and shop keepers have come up with a new technique. They are reducing packing in the branded bags so that they can sell the branded rice as an unbranded product without comprising on the quality. This arrangement with the tactic understanding between the distributors and retailers seem to be working as of now.

Meanwhile, rice merchants claim that the branded rice which used to be exported to foreign countries has also seen a sharp dip due to the GST.

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