2018 (7) TMI 1494 - AAR - GST

Taxability - packing to be considered as unit container or not? - Frozen Meat sold in packaged form - rate of tax - inter-state supplies of goods. What is the classification when frozen meat is sold in packaged form and its HSN code? - What is the rate of tax on frozen meat sold by the company? Held that - The items mentioned in tariff heading 0204 or 0207 other than fresh or chilled would be exigible to tax @ 5% if these are put up in a unit container and bears a brand name or bears a brand name on which actionable claim or enforceable right in court of law is available other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily , subject to conditions as in the annexure I to the said notification - In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Service Tax Act, 2017 the Central Government via N/N. 44/2017 Integrated Tax (rate) New Delhi dated 14.11.2017 has exempted, Inter-State supplies of goods, from the whole of the integrated tax leviable thereon. In the present case, the packing of the frozen carcasses done by them is only a medium of delivery and since these are not in pre-determined units, these packing cannot be termed as Unit Containers - the packaging of frozen sheep/goat carcasses for delivery in primary LDPE bags further packed in secondary HDPE bags of non-standardised quantity done by the applicant cannot be regarded as Unit Container since it is not standardised to hold a uniform predetermined quantity - Neither the packaging is uniform or standardised nor the packages are designed to hold a predetermined quantity. Ruling - The whole (sheep/goat) animal carcass in frozen state in different weight and size packed in LDPE bags without mentioning the weight and one or two such LDPE bags further packed in HDPE bags having mention of varying actual total weight of the carcasses packed in each such HDPE bags and supplied to Army shall not qualify as product put up in Unit Container . The product fall under exemption list as per entry no. 10 of notification No. 2/2017-lntegrated tax (Rate) dated 20 June 2017 upto 14th November 2017 and thereafter as per entry No. 9 of Notification No. 44/2017-Integrated Tax (Rate) dated November 2017.

Summary

Issues:
1. Classification and HSN code for frozen meat sold in packaged form.
2. Rate of tax on frozen meat sold by the company.

Issue 1: Classification and HSN Code for Frozen Meat:
The applicant, a supplier of frozen sheep/goat meat, sought an advance ruling on the classification and HSN code for their product. The Deputy Excise & Taxation Commissioner opined that the frozen meat packed in LDPE bags qualifies as supply of goods in a unit container attracting 12% GST. However, the applicant contested this, arguing that their packaging does not meet the definition of a unit container as per relevant notifications. The authority analyzed the GST rates applicable from July 2017 to November 2017 and from November 2017 onwards for products like sheep meat. They delved into the definitions of unit container and cited case laws to support their decision. The authority ruled that the applicant's packaging method does not constitute a unit container, thus falling under exemption lists specified in the notifications.

Issue 2: Rate of Tax on Frozen Meat:
Regarding the rate of tax on frozen meat sold by the company, the authority determined that the product, which does not qualify as being put up in a unit container, falls under the exemption list as per specific notifications. The ruling specified that the whole frozen animal carcass, packed in LDPE bags without weight indication, and further packed in HDPE bags with varying total weight details, supplied to the Army, does not meet the criteria of a product put up in a unit container. Consequently, the product was deemed exempt from GST based on the entries in the notifications applicable during the relevant periods.

In conclusion, the Authority for Advance Rulings Haryana addressed the issues raised by the applicant regarding the classification and tax rate on frozen meat sold in packaged form. By analyzing the definitions, notifications, and case laws, the authority ruled that the applicant's packaging method did not constitute a unit container, leading to the product falling under specific exemption lists. The detailed analysis and ruling provide clarity on the tax implications for the company's frozen meat supply operations.