GST rate will make sugar slighty cheaper in two southern states, remove the tax advantage at tea auctions, and leave cooking oil price unchanged. But perhaps the bigger impact of the new tax regime on commodities space would be that small players who trade in cash will have to get into the system, which will make the supply chain of big firms more effiecent.

Image result for supply chain under GST

The GST council on Thursday fixed GST rate on sugar tea, coffee,and cooking oil at 5%, while exempting grains, cereals and milk. Responding to GST rates, company executives and merchants said more than GST bigger impacts would be shifted away from cash based by trade by small players and import duty in the case of commodities like edible oils.

Indian sugar mills associations welcomed GST rates, Andra Pradesh and Tamil Nadu currently put VAT on sugar. The taxtation will be 5.5% on sugar which will gives a huge impact on the consumers thought.

At present vat on teas is just 1% but those who sold privately they take VAT 5%, out of the country teas production is about 1,239 million kg nearly 45% was sold through auctions.

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