2021 (1) TMI 429 - AAR - GST

Benefit of exemption under N/N. Sr. No. 27 of the Notification No.02/2017-Central Tax (Rate) dated 28th June, 2017 and N/N. 01/2017-Central Tax (Rate) date 28th June, 2017, as amended - invoices raised to the end use users in case of selling of paneer in loose form without sealing of packet/in loose carry bags and bearing details like name of manufacturer and branches or others as required by FSSAI or other relevant Acts - HELD THAT - The supply paneer in loose form in plastic bags without sealing of packet containing different weight as required by the customers. It is not forthcoming from the facts stated by the applicant that whether such Packages are designed to hold a pre-determined quantity or not and such pre-determined quantity is indicatde on such package or not - If such package is containing different weight and no weight is mentioned on packages, then we can conclude that impugned supply would not satisfy the requirement of the definition of unit container as found in both the notifications - In such a situation, the supply of paneer in loose form in plastic bags without sealing of packet, which do not indicate any information related to weight, would tantamount to being as a product not put up in a unit container for the purpose of Notifications No. 1/2017 and 2/2017-Central Tax-(Rate) both dated 28th June, 2017. Whether such supply is covered by the expression, bearing a registered brand name or bearing a brand name on which an actionable claim or enforceable right in a court of law is available , as per the notifications mentioned? - HELD THAT - Admittedly, the brand name of the applicant is already registered under the specified Act, as they are regularly discharging tax on paneer supplied in aunit container and bearing a registered brand name of the applicant thereon, under GST - Even though, if their brand name is not registered but on such brand name on which an actionable claim or enforceable right in a court of law is available. In such situation, second condition of the notifications cited, also hold to be satisfied. Whether the said package bearing the details like name of manufacturer and branches or others, as required by FSSAI or other relevant Acts thereon, can be considered as not bearing a registered brand name or bearing a brand name on which an actionable claim or enforceable right in a court of law is available and, hence, eligible for exemption from payment of GST? - HELD THAT - In terms of section 18 of the Food Safety and Standards Act, 2006, no person shall manufacture, distribute, sell or expose for sale or dispatch or deliver to any agent or broker for the purpose of sale, any packaged food products which are not marked and labelled in the manner as may be specified by regulations. Further, Rule 6 of the Food Safety and Standards (Packaging and Labelling) Regulations, 2011, in turn mandates provision of details of the manufacturer of the product on the food package - in case of brand names, which are not covered under definition of registered brand name , even a brand name on which an actionable claim or enforceable right in a court of law is available, shall be considered as brand name for the purpose of taxability of product in question, in terms of Notification No. 01/2017-Central Tax (Rate) date 28th June, 2017, as amended - It is thus concluded that mentioning the name and registered address of the supplier as the manufacturer, as per the statutory requirement, is also to be considered as bearing a brand name and, hence, second condition is satisfied. Thus, it can be concluded that the benefit of the exemption provided vide entry at Sr. No. 27 of the Notification No.02/2017-Central Tax (Rate) dated 28th June, 2017, as amended, can be extended to the applicant s product subject to the fulfilment of two conditions viz. (i) Paneer is not put up in unit container, means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a pre-determined quantity or number, which is indicated on such packages and (ii) said unit container is not bearing a registered brand name or a brand name on which an actionable claim or enforceable right in a court of law is available.

Summary

Issues Involved:
1. Taxability of paneer sold in loose form in plastic carry bags.
2. Interpretation of "unit container" under GST notifications.
3. Applicability of GST exemption for paneer not in unit containers and without a registered brand name.

Issue-wise Detailed Analysis:

1. Taxability of Paneer Sold in Loose Form:
The applicant, engaged in manufacturing and selling paneer and other milk products, queried whether the exemption from GST at 0% applies when selling paneer in loose form without sealed packets but bearing details required by FSSAI or other relevant Acts. The applicant argued that since the paneer is not packed in a unit container and only bears mandatory details, it should be exempt from GST as per Notification No. 2/2017-Central Tax (Rate).

2. Interpretation of "Unit Container" Under GST Notifications:
The ruling examined the definition of "unit container" as per Notification No. 1/2017 and 2/2017-Central Tax (Rate). A "unit container" is defined as a package designed to hold a pre-determined quantity or number, indicated on the package. The applicant's paneer sold in loose form in plastic bags without sealing and without indicating weight does not meet this definition, as it does not hold a pre-determined quantity indicated on the package.

3. Applicability of GST Exemption for Paneer Not in Unit Containers and Without a Registered Brand Name:
The ruling further analyzed whether the paneer sold in loose form meets the conditions for GST exemption under Notification No. 2/2017-Central Tax (Rate). The notification exempts paneer from GST if it is not put up in a unit container and does not bear a registered brand name or a brand name with an actionable claim or enforceable right. The applicant's product, which is not in a unit container and only bears details as per FSSAI requirements, does not fulfill the criteria for a registered brand name or actionable claim.

Conclusion:
The ruling concluded that the benefit of the GST exemption can be extended to the applicant's product if two conditions are met:
1. The paneer is not put up in a unit container (i.e., a package designed to hold a pre-determined quantity or number, which is indicated on such packages).
2. The unit container does not bear a registered brand name or a brand name on which an actionable claim or enforceable right in a court of law is available.

Ruling:
The applicant's paneer sold in loose form without sealing of packet and bearing details required by FSSAI or other relevant Acts is eligible for the GST exemption provided under entry at Sr. No. 27 of Notification No. 02/2017-Central Tax (Rate), subject to the fulfillment of the two specified conditions.