The upcoming Goods and Services Tax (GST) Council meeting is unlikely to take up the proposal to reduce the GST rate on millet-based mixes to 5% or nil from 12% or 18% now, as a panel of senior officials has suggested more in-depth study of the matter.

In February, the council discussed reduction in the GST rate on millet-based health mix products consisting of at least 70% of millets. Following discussions during the officers’ meeting in February, it was felt that the matter required further examination by the fitment committee with regard to products to be covered in this category and their classification. The council had referred the matter to the committee for further analysis before taking any decision.

Sources said the classification and tax treatment of millets is likely to affect the classification and applicable tax rate on a large number of similarly placed products or mixes, such as idli and dosa mixes, entailing significant revenue implications.

The raw material millet flour undergoes processing and consequent significant value addition that results in a new value-added commercial commodity, which is sold at a premium in the market as against millet flour or roasted millet.

Further, preparations are often used for making beverages, gruel, food suitable for infants or young children and dietetic foods by mixing with or boiling in milk/water. The instant commodity generally has a similar intent of usage and undergoes a similar cooking process.

Millet-producing states such as Odisha are seeking reduction in tax rates to promote the nutritious food chain. Odisha has suggested that millets are a seeded grass with high nutritional value and hence the parameter regarding percentage of millets in the product mix should be brought down from proposed 70% to 50%.