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TMI Blog2023 (6) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... fied commodities are supplied in a package that do not require declarations / compliances under the Legal Metrology Act, 2009 ( 1 of 2010), and the rules made thereunder, the same would not be treated as pre-packaged and labelled for the purposes of GST levy and that rice supplied in pre-packaged form would fall in the definition of pre-packaged commodity under Legal Metrology Act, 2009 and rules made thereunder, if such prepackaged and labelled packages contains a quantity up to 25 Kgs. GST would be applicable on the supply of prepackaged and labelled rice up to 25 Kgs, for both domestic supplies as also for export clearances. Thus, the applicable rate of GST on the supply of pre-packaged and labelled rice up to 25 Kgs, for both domestic sales as also for export clearances is 5% [2.5% CGST + 2.5% SGST] or (5% IGST) as the case may be, in terms of amended entry no. 51 to Schedule-1 to Notification no. 01/2017-CT(Rate) /Integrated tax [Rate) dated 28.6.2017 as amended, with effect from 18.7.2022 - for inte-rstate supply of taxable goods by a registered supplier to a registered recipient/ merchant exporter, for exports the IGST rate of 0.1 % has been stipulated vide Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o it. They procure empty bag and get them printed/labelled according to the specifications of the foreign buyer from supplier of packing material. (ii) The supplier of packing material dispatches the printed/labelled empty bags, having capacity upto 25 kgs, to applicant's premises. (iii) Applicant packs rice in their factory in these bags and export it to foreign buyer. B. Customers located in India who purchase rice from the applicant for the purpose of exports on bill to ship to basis ( Exporter ),- (i) The supplier of packing material dispatches the printed/labelled empty bags, having capacity upto 25 kgs, to applicant's premises on directions of exporter (i.e. on bill to ship to basis, bill to exporter and ship to us). (ii) Applicant pack the rice in empty bags and dispatch the prepackaged rice to customs port on instructions of Exporter (i.e., bill to exporter and ship to customs port). Exporter ultimately exports the rice to foreign buyer. C. Customers located in India who purchase rice from the applicant for the purpose of exports ( Exporter ).- (i) The supplier of packing material dispatches the printed/labelled empty bags, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer? (ii) Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25Kgs, 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. (iii) Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25Kgs, to the factory of exporter. Exporter will export the rice. The authorized representative(s) of the applicant submitted that GST would apply on specified goods where the pre-packaged commodity is supplied in packages containing quantity of less than or equal to 25Kg and that Pre-packaged and labelled commodities manufactured exclusively for export have not been excluded from the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder. Thus, it was the opinion of the authorized representative(s) of the applicant, that GST would be applicable on the supply of pre-packaged and labelled rice up to 25 Kgs, irrespective of the fact that it is for domestic sale or for the purpose of exports. Both the authorized representatives, reiterated their point of view in the matter as made in their ARA-01 and thus requested for a ruling in the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant and on the concerned officer or the jurisdictional officer as stipulated above. 6.1 The jurisdictional Deputy Commissioner, Division-1, CGST Raipur under his letter CGST/AAR/D-l/RPR/2022-23 dated 21/23.3.2023 opined that the transactions made through the referred questions by the applicant fall within the purview of the scope of supply and attracts levy of tax as applicable under the GST Act. 7. We have gone through the submissions made by the applicant and have examined the contentions raised by them. At the outset, we find that the issue raised in the application is squarely covered under Section 97(2) (b) and Section 97(2)(e) of the CGST Act 2017 being a matter relating to applicability of a notification and determination of the liability to pay tax on any goods on its supply. We, therefore, admit the application for consideration on merits. 8. Now we proceed to decide the issues raised by the applicant on merits. The issues raised by the applicant in the instant case in hand is regarding leviability of GST on export of pre-packaged and labelled rice up to 25Kgs directly to a foreign buyer / to an Exporter on bill to ship to basis/ to the factory of exporter. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be prescribed ................................................................ A plain reading of above provision implies that government has power to notify rates of tax on recommendation of GST council. The combined rate of CGST and SGST or IGST cannot be more than 40 per cent. 9.2 The Central government on recommendation of GST council has notified the rate of applicable tax payable on goods vide notification no. 01/2017 - CT (Rate) / integrated tax (rate) dated 28/06/2017. It may be noted that notifications regarding central tax (CGST) are issued by central government and notification regarding state tax (SGST) issued by respective state government have identical provisions. The said notifications are subject to amendments from time to time by the government. The schedules in notifications issued have reference to chapter, heading, sub heading and tariff items. 10. Now on coming to the applicable tax rate on such goods there is no doubt that the same depends upon the classification of the goods in question and the effective rates of such goods are specified in schedules appended to Notification no. 01/2017-CT(Rate) dated 28.6.2017 as amended and subject to the adheren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule V- 1.5% Schedule VI-0.125% Further, as per explanation (ii) to Notification no. 1/2017- Central Tax (Rate), 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 thereunder.' 10.2 It is also seen that consequent upon amendment in Sr. no. 51 in Notification no. 1/2017-Central Tax (Rate) vide Notification no. 6/2022-Central Tax (Rate), dated 13 th July 2022 effective from 18.7.2022, the FAQ issued in this matter reads as under: - That the changes relating to GST rate, in pursuance of recommendations made by the GST Council in its 47th meeting, came into effect from today, 18th of July, 2022. One such change is moving from imposition of GST on specified goods when bearing a registered brand or brand in respect of which an actionable claim or enforceable right in a court of law is available to imposition of GST on such g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flour, etc.), rule 3 (a) of Chapter-II of Legal Metrology (Packaged Commodities) Rules, 2011, prescribes that package of commodities containing quantity of more than 25 kg or 25 litre do not require a declaration to be made under rule 6 thereof. Accordingly, GST would apply on such specified goods where the pre-packaged commodity is supplied in packages containing quantity of less than or equal to 25 kilograms. 10.3 It would also be not out of place to mention here that the applicant in their application has cited three scenarios of clearances of rice to customers to whom sales are executed viz. Customer located abroad (foreign buyer), Customer located in India who purchase rice from them for the purpose of exports on bill to ship to basis (Exporter) and Customers located in India who purchase rice from them for the purpose of exports (Exporter). In this regard for interstate supply of taxable goods by a registered supplier to a registered recipient/ merchant exporter, for exports the IGST rate of 0.1% has been stipulated vide Notification no. 41/2017-lntegrated Tax (Rate) dated 23.10.2017. Similarly, for such intra state supply, the rate for supplies to exporters is provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional lax officer of such supplier. The registered supplier shall not be eligible for the above-mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice. 10.2 Thus, from the above it gets abundantly clear that that if specified commodities are supplied in a package that do not require declarations / compliances under the Legal Metrology Act, 2009 ( 1 of 2010), and the rules made thereunder, the same would not be treated as pre-packaged and labelled for the purposes of GST levy and that rice supplied in pre-packaged form would fall in the definition of pre-packaged commodity under Legal Metrology Act, 2009 and rules made thereunder, if such prepackaged and labelled packages contains a quantity up to 25 Kgs. Accordingly, we come to the considered view that GST would be applicable on the supply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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