GAMING GST

BUSINESSES ACROSS THE COUNTRY ARE INDULGING IN LARGE GST VIOLATIONS. NO WONDER THERE IS A HUGE SHORTFALL IN COLLECTIONS

- AJITA SHASHIDHAR, DIPAK MONDAL AND JOE C. MATHEW

Ranchi-headquartered ‘Baba Rice’ is a household name in the eastern part of India. Even though it’s not a premium Basmati brand, an average consumer in Jharkhand or adjoining Odisha would prefer it to national brands such as Daawat or India Gate as is evident from the 70 per cent marketshare Baba Rice enjoys in the region. Yet, parent Baba Agro Foods recently rolled out the same rice under another brand ‘Ranchi Gold’. Intriguingly, while Baba Rice is priced at ₹2,640 per quintal, Ranchi Gold is just under, at ₹2,610. Why? Baba Agro Foods Chairman Yogesh Kumar Sahu says the marketshare of Baba Rice has eroded 10 per cent since the arrival of GST in July 2017. Ranchi Gold was his desperate defence mechanism.

‘Baby Doll’, ‘Babuji’, ‘Apple’ and even ‘Kakaji’ are just a few rival brands that mushroomed and undersold Baba Rice by circumventing GST. While branded commodities such as rice, atta and dal are subject to 5 per cent GST (commodities in the pre-GST era did not attract tax), white label products can escape GST.