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TMI Blog2023 (12) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the proposed sale is being made by the wholesale dealer/trader, in this case, the Applicant. Coming to the last condition, it is found that such sale proposed to be made by the Applicant, should also establish that it is not for commercial or trade purposes even though it is meant for use by that institution. As per the facts submitted by the Applicant, they intend to supply to institutional consumers such as The Indian Army, Ministry of Defence, The Park Hotel, Chennai etc. - for supplies to be made to institutional consumers, it is found that the exemption from GST as claimed by the Applicant would be available if and only if it fulfills all the conditions envisaged under Rule 2(bc) of the Packaged Commodities Rules 2011 for Institutional Consumer . As regards the supply of the impugned products to a distributor who would further supply to institutional consumers, Rule 3(c) of the Chapter II of the Packaged Commodities Rules, states that 'packaged commodities meant for industrial consumers or institutional consumers'. Thus the condition given in the said rule is that the end user should be industrial consumers or institutional consumers. The Applicant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Applicant), a GST Registrant, is a Partnership firm under the Administrative control of Centre and is engaged in trading of grains and pulses for Feed Industries and Chilled Chicken for customers. 2.1 The Applicant submitted a copy of Electronic Cash Ledger evidencing payment of application fees of Rs. 5,000/ each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 2.2 The applicant has submitted that - They propose to undertake trading of the items viz. Poultry Meat - Not Cut in pieces [frozen products attain a temperature of 18 C or below] falling under HSN Code - 0207 1200 and Poultry Meat - Cuts and Offal [frozen products attain a temperature of 18 C or below] falling under HSN Code - 0207 1400; The said items would be purchased from the manufacturer viz. M/s. Shanthi Feeds Private Limited, Coimbatore; The supply is in the form of a wholesale bag of 30 kgs containing 15 small packs of 2 kgs each; The package contains a specific declaration - Packed exclusively for Institutional Sale and not for Retail Sale , The supply would be made to the Institutional buyers in any of the two modes: Supply made by the Applicant d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modity is pre-packed or the label affixed to the package is required to bear the declarations under the provisions of Legal Metrology Act. As per Section 2(1) of Legal Metrology Act, pre-packaged commodity has been defined as follows:- pre-packed commodity means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quantity; Frozen chicken is packed in wholesale package of 30 Kgs containing 15 small packs of 2 Kgs each. These qualify to be a pre-packaged commodity as per Legal Metrology Act as the said conditions are satisfied as the packing of frozen chicken is done without the presence of purchaser and the package is of a predetermined quantity; Section 18 of Legal Metrology Act which covers declaration on pre-packed commodities provides that no person should manufacture, pack, sell distribute, deliver, offer or possess for sale of any pre-packaged commodity unless such package is in such standard quantities or number and bears thereon such declarations and particulars as may be prescribed. Legal Metrology (Packag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of frozen chicken contained in a wholesale bag of 30 Kgs. Containing 15 small packs of 2 Kgs each made to non-institutional consumers the same would be taxable at 5% as per Sl. No. 1 of Schedule I to Notification No. 1/2017-CT (R) as amended, read with Notification No. 6/2022-CT (R) dated 13.07.2022, against HSN 0207, All goods other than fresh or chilled, pre-packaged and labelled . 4.1 The concerned State authority vide letter dated 21.12.2022 has stated that there have not been any proceedings already decided nor are there any pending proceedings with respect to the applicant. 4.2 The Centre authority, vide letter dated 13.10.2022, has stated that Notification No. 01/2017 dated 28.06.2017 has described GST on frozen chicken. The relevant portion of the said entry is in Schedule-II to the said notification with GST at 12% and extract of which is as under: S.No. Chapter/Heading/ Sub-heading / Tariff item Description of Goods 7 0207 Meat and edible offal, of the poultry of heading 0105, frozen and put up in unit containers The above ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Applicant, vide email dated 22.08.2023, submitted copies of few purchase and sales invoices of chilled chicken. They further stated that no agreement was entered into by them with M/s. Shanthi Feeds Private Limited. DISCUSSIONS AND FINDINGS 7.1 We have carefully considered the submissions made by the applicant in the advance ruling application, the additional submissions made during the personal hearing and the comments furnished by the Centre and State Tax Authorities. The applicant filed advance ruling application under Section 97(2) of GST Act, 2017. 7.2 We find that the Applicant has submitted that they are proposing to undertake trading of the 'frozen chicken viz. Poultry Meat Not Cut in pieces falling under HSN Code 02071200 and Poultry Meat Cuts and Offal falling under HSN Code - 02071400. 7.3 It was also submitted by the Applicant that the said products would be purchased from the manufacturer viz. M/s. Shanthi Feeds Private Limited, Coimbatore and the supply would be in the form of a wholesale bag of 30 kgs containing 15 small packs of 2 kgs each: and the package would contain a specific declaration - Packed exclusively for Institutional Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quantity; 8.3 From the facts narrated by the Applicant in their ARA application, we are of the view that the impugned product viz. frozen chicken is a 'pre-packaged commodity' as per the Legal Metrology Act 2009 or a 'pre-packaged and labelled' goods as per the explanation given in Notification No. 2/2017-CT (Rate) dated 28.06.2017 as amended. 8.4 Pursuant to the Legal Metrology Act, 2009, Legal Metrology (Packaged Commodities), Rules 2011 has been issued in respect of declarations to be made on the packaged commodities. 8.5 As per Rule 3 of the Legal Metrology (Packaged Commodities) Rules, 2011, as amended, which reads as:- Provisions Applicable To Packages Intended For Retail Sale 3. Application of Chapter. - The provisions of this chapter shall not apply to- (a) packages of commodities containing quantity of more than 25 kilogram or 25 litre; (b) cement, fertilizer and agricultural farm produce sold in bags above 50 kilogram; and (c) package ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusively for use by that institution; and thirdly, it is not for commercial or trade purposes. 8.11 From the facts enumerated and the photographs submitted by the Applicant, we find that a declaration that 'packed exclusively for institutional sale, not for retail sale' will be affixed on the bag. Hence the first condition is met. We also find that the proposed sale is being made by the wholesale dealer/trader, in this case, the Applicant. Coming to the last condition, we find that such sale proposed to be made by the Applicant, should also establish that it is not for commercial or trade purposes even though it is meant for use by that institution. As per the facts submitted by the Applicant, they intend to supply to institutional consumers such as The Indian Army, Ministry of Defence, The Park Hotel, Chennai etc. We find that in the case of supply to The Park Hotel, Chennai', if considered as an institutional consumer, even though supply is meant for use by that institution, the same is not for commercial or trade purposes cannot be established. Hence, for supplies to be made to institutional consumers, we find that the exemption from GST as claimed by the Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... composition rate, as the ease may be, in usual manner. 8.13 Applying the ratio of the above clarifications read with the provisions of the Legal Metrology Act, 2009, mentioned supra, the supplies made to the distributor meant for non-institutional consumers, will fall under the exclusion clause of the exemption Notification No. 02/2017-CT(Rate) dated 28.06.2017(i.e. pre-packaged and labelled). 8.14 As regards, the rate of GST applicable to the impugned supply, the Notification No. 01 /2017-CT (Rate) dated 28.06.2017 as amended, reads as follows under Schedule I (GST@ 5%); S.No Chapter / Heading / Sub-heading / Tariff item Description of Goods 1 0202, 0203, 0204, 0205, 0206, 0207, 0208, 0209, 0210 All goods (other than fresh or chilled], pre-packaged and labelled; Explanation . - For the purposes of this notification, - (i) The phrase 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 predetermined quantity o ..... 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