FCI Permits Custom-Milled Rice Delivery, but GST and Storage Issues Persist
The Food Corporation of India (FCI) has provided some relief to rice millers by permitting the delivery of custom-milled rice (CMR). However, unresolved challenges related to GST on fortified rice kernels (FRK) and the allocation of godowns for storage are preventing millers from proceeding smoothly.
Key Challenges Facing Rice Millers
- GST Disparity on Fortified Rice Kernels (FRK):
FRK manufacturers levy an 18% GST, while the government reimburses only 5% to millers.
This disparity is creating a financial strain on millers, who demand the government either reduce the GST to 5% or ensure a full reimbursement.
“We purchase FRK at ₹5,000 per quintal plus 18% GST, but only 5% is reimbursed. This needs to be corrected as it was last year,” said the President of Karnal Rice Millers and Dealers’ Association.
- Non-Allocation of Godowns:
FCI has yet to assign nearby godowns for rice storage, leading to higher transportation costs and delivery delays.
Millers are urging FCI to link godowns to mills in their vicinity to streamline operations and reduce logistical burdens.
Procurement and Delivery Deadlines
Under the CMR policy, millers must adhere to a staggered delivery schedule:
25% by December-end
20% by January-end
15% by February-end
25% by March-end
The remaining by April-end
Despite completing paddy procurement by November 15, millers are unable to meet these deadlines due to the unresolved issues.
Industry Reactions and Expert Insights
Rice millers have welcomed the FCI’s decision to allow CMR delivery but stressed the importance of resolving these two hurdles urgently.
An industry expert noted:
“The FCI has granted permission, and procurement agencies are completing the physical verification process. However, deliveries will remain stalled until GST and godown issues are resolved.”
The FCI has acknowledged the challenges, with discussions reportedly underway to address them soon.
Way Forward
For smoother CMR operations:
The GST on FRK should either be reduced or fully reimbursed.
Godown allocation should be expedited, prioritizing nearby locations to minimize costs.
