CA M.L Rajoria & CS Riti Goyal
With the roll-out of GST and its implementation, the branded rice has become costlier due to imposition of GST of 5 % on rice with registered brand name. Rice being one of the most consumed cereals is affecting the normal consumers. A person has to pay 5% extra on the consumption of every one kg of branded rice.
Before the implementation of GST, rice had always been exempted. However, after the implementation of GST, there been lot of confusions and discussions with respect to levy of GST on rice. The various notifications and circulars had been published by the government in order to bring clarity on this matter. The list of notifications and circular which deal with are as follows:
1. Notification No-1/2017 CT(R), dated: 28/06/2017
2. Notification No-2/2017 CT(R),dated: 28/06/2017
3. Notification No-27/2017 CT (R) ,dated:- 22/9/2017
4. Notification No. 28/2017 CT(R), dated:-22/09/2017
5. Circular No. 19/19/2017-GST, dated: 20/11/2017
On the basis of all the aforesaid notifications and circulars we have prepared some FAQ’s on the applicability of GST on rice.
1. What is the applicability of GST on rice?
Ans. GST is levied on rice as follows:
a. Rice put up in unit containers with registered brand name:- GST @ 5% will be levied(Notification No-27/2017 CT (R) ,dated:- 22/9/2017).
b. Rice put up in containers with brand name: – GST @ 5% will be levied (Notification No-27/2017 CT (R), dated: – 22/9/2017).
c. Un-branded rice- Exempted from GST (Notification No: 28/2017 CT (R), dated: 22/09/2017).
2. What do you mean by registered brand name?
Ans. As per Notification No. 27/2017 CT(R), dated:22/09/2017,the registered brand name means:
a. A brand that is registered under the Trade Marks Act, 1999 as on 15th May 2017.
b. A brand that is registered under the Copyright Act, 1974 as on 15th May 2017.
c. A brand that is registered under any other law, in any country for the time-being in force as on 15th May 2017.
3. What do you mean by brand name?
Ans. As per Notification No. 27/2017 CT(R), dated:22/09/2017, brand name means brand name or trade name, that is to say, a name or mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person.
4. Can a dealer/manufacturer of rice with un-registered brand avail the exemption from GST?
Ans. Yes, a dealer/manufacturer with un-registered brand can avail the exemption from GST.
5. How can a dealer/ manufacturer of rice with un-registered brand avail the exemption?
Ans. A dealer/ manufacturer of rice with un-register brand name can avail the exemption from GST, provided he voluntarily surrenders the actionable claim or enforceable right of the brand name.
6. What are the provisions for voluntarily surrendering the trade mark or the brand name?
Ans. As per Notification No CT(R). 27/2017, dated:22/09/2017, the trader will has to comply with the following:
a. He will have to file an affidavit with the jurisdictional commissioner of Central Tax that he is voluntarily surrendering the actionable claim or enforceable right on the brand-name, and
b. He will have to print in in-delible ink in his unit containers of rice hat he has voluntarily forgone his brand name.
7. What is the meaning of in-delible ink?
Ans. An indelible ink means an ink that is impossible to remove by washing or other ways.
8. Can a dealer/manufacturer with registered brand name voluntarily surrender the brand name?
Ans. Yes, he can surrender the brand name voluntarily. However, that will not entitle him with exemption from GST.
9. Milling of paddy is an intermediate production process in relation to cultivation of plants for food, fibre or other similar products or agricultural produce or not?
Ans. Milling of paddy is not an intermediate production process. It is a process carried out after the process of cultivation is over and paddy has been harvested. Further, processing of paddy into rice is not usually carried out by cultivators but by rice millers. Milling of paddy into rice also changes its essential characteristics. Therefore, milling of paddy into rice cannot be considered as an intermediate production process in relation to cultivation of plants for food, fibre or other similar products or agricultural produce.
10. At what rate GST is charged on milling of paddy into rice.
Ans. As per circular No.19/19/2017 , dated:20/11/2017, milling of paddy into rice on job-work basis is liable to GST @5% on the processing charges and not on the entire value of rice.
11. What is the meaning of job-work?
Ans. Job work has been defined under section 2 (68) of the CGST Act to mean any treatment or process undertaken by a person on goods belonging to another registered person. Further, any treatment or process which is applied to another person’s goods is a supply of service.
Disclaimer:
Presentations are intended for educational purposes only and do not replace independent professional judgment. We does not endorse or approve, and assumes no responsibility for, the content, accuracy or completeness of the information presented.
For any queries or advice author can be reached at mlrajoria13@gmail.com
Author Bio
I am in trading of unbranded rice i am having a current account in bank, the bank is asking for GST No. as rice is an exempt product still i have to apply for gst registration.
Dear Sir,
I am working in a distillary unit,
Our Unit major raw material is broken rice,
we require clarity on unloading of broken rice is it leviable GST or not.
Unloading/loading of rice is exempted from gst.
Hello sir,
I own a rice mill in Karnataka, I process and sell both branded and unbranded rice. Throughout the year I incur to pay huge GST on the machinery, repairs, and many other services. How can i take the input of this GST paid. And can you plase let me know any are there any other options avaliable.
dear sir
If i done job work of paddy with converting into rice how can i take the gst for excemption
is loading,unloading and transportation of rice by barge in water is chargeable under gst. if yes at what rate
Sir I have a doubt regarding branding on rice in GST. My question is I have applied a brand for trademark but the status is objected and not registered. so we have withdraw our brand from trademark on nov 2017 will it be eligible for exemption from GST
Hello sir / madam,
I am planning to start trading business in selling rice (basmati & non-basmati) in packets with a brand name but will not get it registered. Do I need to get a GST registration number for rice trading. Please advise.
Regards,
Gaurav
Vide Circular No. 19/19/2017-GST dtd. 20.11.2017 taxability of Custom Milling charges for Paddy to Rice has been explained and clarified.
In Chhattisgarh state the Government is procuring Paddy at support price from farmers through various Co-operative Societies. The Paddy so procured is then issued to Rice Mills for custom milling of paddy and Rice is delivered to Government through State Civil Supplies Corporation for sale through Fair Price Public Distribution System.
For Custom Milling the the service charges as fixed by the Central Government is paid on which GST is also paid by the Government.
When a rice miller mills additional quantity he is paid Protsahan Rashi (Additional Encouragement Amount) based on quantity milled but the Government is not paying GST on this.
Please guide as to whether this Protsahan Rashi is not liable to GST ? If so kindly share relevant provision / notification.
If we have done job work of boiling and drying of paddy without converting into rice gst is applicable on such job work? As we have not change its essential characterstics.
LIME LIGHT CLARIFICATION HELPS AMBIGUITY OF BRAND NAME