GST on Pre-packing foods.

 

FAQ dt 17-7-2022 confirms now:

NN 6/2022 and 7/2022 have now w.e.f.18-07-2022*  made edible items taxable @ 5%/12% if these items are pre packaged and labled i.e. items are placed in package, whether sealed or not, carrying  pre determined quantity. The items must be placed in package without the purchaser being present to be called pre packaged. Further package or its label must be required to bear declarations under Legal Meteorology Act to bring it under taxation net. In other words if package is not intended to carry pre- determined quantity or is not required to bear statutory declarations, then gst shall not be imposed.

Now S.18 of Legal meteorology  Act 2009 mandates bearing of declaration as per Rules. Rule 6 read with Rule 3 of Legal Meteorology Packaged Commodity Rules 2011 mandates declaration for packages intended for retail sale i.e. sale, distribution or delivery of commodity through retails shops for consumption by an individual or group of individuals barring two exceptions:

a)            Packages of commodities containing quantity of more than 25 kgs.

b)            Packages meant for industrial consumers or institutional consumers like transportation, airways, railways, Hotels, Hospitals or any other service institution who buy packaged commodity directly from manufacturer for use.

Further as per R. 24 of Legal Meteorology Rule 2011 every  wholesale package shall bear declarations under Legal Meteorology Act and hence gst shall be charged. Whole Sale Packages are packages intended for sale, distribution or delivery to intermediary and is

i.              Either comprised of number of retail packages and is not intended for sale direct to single consumer or

ii.             Contain commodity in bulk to enable sale to consumer in smaller quantity.

Packages containing ten or more retail packages, duly labeled are also whole sale packages.

There is specific exemption from declarations on package or labels affixed there to under R 26 of Metrology Rules for packages containing commodities weighing/ measuring 10 gms/ 10 Mls or less from bearing of declaration. Fast Food Items packed by restuarants, hotels and like are also exempted from declaration. Specified Drug Formulations are also outside purview of declaration requirements. Further agriculture form produce in packages above 50 kgs also does not warrant declarations. Here it may be noted that fast food items and drug formulations though requiring declaration requirement under Legal Meterology are separately taxable. Agricultural Form produce in packages above 50 kgs is separately exempted from gst.

Hence edible items of 10 gms/10 mls or less and more than 25Kgs/25 Literes do not require declaration under Legal Meterology Act and hence outside the definition of pre packed and labeled commodity and hence shall  not invite GST.

Rice, Flour, Chenna, Paneer, Curd,  lassi, butter milk natural honey, jaggery, khansari sugar, Rye, Maize, Meat, Fish, Animal Products  etc shall be affected by these changes