Currently, certain food items are exempt from GST if they are not put up in the unit container or they are unbranded or if the supplier waives the right to the brand through a declaration.
The GST council recently recommended revising the scope of GST exemption to exclude the specified food items if the Supplies are pre-packed, pre-labelled, in accordance with the Legal Metrology Act.
The amending exemption notification can be seen to have replaced the previous conditions of ‘unit container’ and ‘brand name’ with the new conditions of ‘pre-packaged and labelled’.
What will be treated as Pre-packaged and labelled under GST?
As per GST Notifications ‘Pre-packaged and labelled’ means a ‘pre-packaged commodity’ as defined in clauses (l) of section 2 of the Legal Metrology Act, 2009 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 and the rules made thereunder.
What is a Pre-packaged commodity?
Section 2(l) – Legal Metrology Act, 2009.
“Pre-packaged 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;
The aforesaid definition does not differentiate between a “pre-packaged commodity” meant for retail sale or wholesale.
What are declarations under the provisions of the Legal Metrology Act, 2009?
Declarations on pre-packaged commodities as per Section 18 of the Act is
(1) No person shall manufacture, pack, sell, Import, distribute, deliver, offer, expose or possess for sale any pre-packaged commodity unless such package is in such standard quantities or number and bears thereon such declarations and particulars in such manner as may be prescribed.
(2) Any advertisement mentioning the retail sale price of a pre-packaged commodity shall contain a
declaration as to the net quantity or number of the commodity contained in the package in such form and
manner as may be prescribed.
List of Food items which is Pre-packed and labelled shall attract GST.
| All goods, other than fresh or chilled, other than pre-packaged and labelled.(0202, 0203, 0204, 0205, 0206, 0207, 0208, 0209, 0210) |
| All goods, other than fresh or chilled and, other than pre-packaged and labelled.(0303, 0304, 0305, 0306, 0307, 0308, 0309) |
| Curd, Lassi, Butter milk, other than pre-packaged and labelled.(403) |
| Chena or paneer, other than pre-packaged and labelled.(406) |
| Natural honey, other than pre-packaged and labelled.(409) |
| All goods, other than fresh or chilled, other than pre-packaged and labelled.(504) |
| Dried leguminous vegetables, shelled, whether or not skinned or split, other than pre-packaged and labelled.(713) |
| Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, frozen, whether or not sliced or in the form of pellets, other than pre-packaged and labelled.(714) |
| Dried makhana, whether or not shelled or peeled, other than pre-packaged and labelled.(8) |
| Wheat and meslin, other than pre-packaged and labelled.(1001) |
| Rye, other than pre-packaged and labelled.(1002) |
| Barley, other than pre-packaged and labelled.(1003) |
| Oats, other than those, other than pre-packaged and labelled.(1004) |
| Maize (corn), other than pre-packaged and labelled.(1005) |
| Rice, other than pre-packaged and labelled.(1006) |
| Grain sorghum, other than pre-packaged and labelled.(1007) |
| Buckwheat, millet and canary seed; other cereals such as Jawar, Bajra, Ragi, other than pre-packaged and labelled.(1008) |
| Wheat or meslin flour, other than pre-packaged and labelled.(1101) |
| Cereal flours other than of wheat or meslin, maize (corn) flour, Rye flour, etc., other than pre-packaged and labelled.(1102) |
| Cereal groats, meal and pellets, other than pre-packaged and labelled.(1103 ) |
| Flour, powder, flakes, granules or pellets of potatoes, other than pre-packaged and labelled.(1105) |
| Flour, of the dried leguminous vegetables of heading 0713 (pulses) , other than guar meal 1106 10 10 and guar gum refined split 1106 10 90, of sago or of roots or tubers of heading 0714 or of the products of Chapter 8 i.e. of tamarind, of singoda, mango flour, etc., other than pre-packaged and labelled.(1106) |
| Jaggery of all types including Cane Jaggery (gur), Palmyra Jaggery; Khandsari Sugar, other than pre-packaged and labelled.(1701 or 1702) |
| Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira, parched rice, commonly known as khoi, parched paddy or rice coated with sugar or gur, commonly known as Murki, other than pre-packaged and labelled.(1904) |
| Tender coconut water, other than pre-packaged and labelled.(2009 89 90) |
| Water, other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container(2201) |
| All goods and organic manure, other than pre-packaged and labelled.(3101) |
| Coir pith compost, other than pre-packaged and labelled(53) |
To simplify the notification we conclude over opinion that if all the conditions is satisfied then only GST will be applicable on the transaction:
- The commodity is pre-packed in a package.
- The product is placed in a package of any kind (sealed or not) Without the purchaser is present
- There should be a pre-determined quantity.
- There is a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act, 2009.
This notification shall come into force from 18th July,2022.
Trade associations from across the country have written to the finance minister requesting that the GST on unbranded pre-packaged food items be rescinded or defer its implementation.
Disclaimer: This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
