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2024 (2) TMI 1058 - AAR - GSTLevy of GST - export of pre-packaged and labelled rice Up to 25 Kgs, to foreign buyer - supply of pre-packaged and labelled Rice up to 25 Kgs, to exporter on bill to ship to basis i.e., bill to exporter and ship to customs port, Exporter ultimately exports the rice to foreign buyer - supply of pre-packaged and labelled rice up to 25 Kgs, to the factory of exporter, Exporter will export the rice - HELD THAT - Reference invited to the Notification no 06/2022 (CT Rate), dated 18th July 2022 wherein, GST has been made applicable on supply of pre-packaged and labelled commodities attracting provisions of Legal Metrology Act, 2009. The expression pre-packaged and labelled means a pre-packaged commodity as defined in clause (I) of Section 2 of the Legal Metrology Act, 2009 (1 of 2010) where, the package in which the commodity is pre packed or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act 2009 (1 of 2010) and the rules made there under. In the instant case, the ultimate buyer is not present and the commodity is being prepacked for an unknown ultimate buyer. The buyer from the applicant is re-selling the same to another buyer be it export or indigenous. This advance ruling authority agrees with the observation regarding the applicability of GST on pre-packaged and labelled irrespective of the fact that whether it is for domestic sale or exported outside the country. Thus, GST will be applicable on all three issues.
Issues Involved:
1. Whether GST would be leviable on export of pre-packaged and labelled rice up to 25 Kgs to a foreign buyer. 2. Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25 Kgs to an exporter on a "bill to ship to" basis, where the exporter ultimately exports the rice. 3. Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25 Kgs to the factory of an exporter, where the exporter will export the rice. Summary: Issue 1: GST on Export of Pre-Packaged and Labelled Rice to Foreign Buyer The applicant, engaged in manufacturing and supplying rice, exports pre-packaged and labelled rice in quantities up to 25 Kgs to foreign buyers. The foreign buyer provides specifications for the packaging, and the applicant procures and prints the bags accordingly. The rice is then exported in these pre-packaged bags. The ruling confirmed that GST would be leviable on such exports, as per Notification No 06/2022 (CT Rate), dated 18th July 2022, which mandates GST on "pre-packaged and labelled" commodities under the Legal Metrology Act, 2009. Issue 2: GST on Supply to Exporter on "Bill to Ship to" BasisThe applicant supplies pre-packaged and labelled rice up to 25 Kgs to exporters on a "bill to ship to" basis, where the rice is dispatched to the customs port as per the exporter's instructions, and the exporter ultimately exports the rice. The ruling affirmed that GST would be applicable on such supplies, adhering to the same legal provisions and clarifications issued by the Ministry of Finance regarding the GST levy on pre-packaged and labelled goods. Issue 3: GST on Supply to Exporter's FactoryThe applicant supplies pre-packaged and labelled rice up to 25 Kgs to the factory of an exporter, who then exports the rice. The printed/labelled empty bags are dispatched to the applicant's premises based on the exporter's directions. The ruling confirmed that GST would be applicable on these supplies as well, following the same legal framework and clarifications as mentioned for the other issues. Ruling:For all three issues, the Authority for Advance Ruling, Andhra Pradesh, ruled affirmatively, confirming that GST would be applicable on the export and supply of pre-packaged and labelled rice up to 25 Kgs, irrespective of whether the rice is sold domestically or exported.
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