In re AOV Agro Food Pvt. Ltd. (GST AAR Haryana)
Question Raised- Meat of Sheep or goat or poultry, frozen and packed in LDPE/HDPE bags having varied weight and quantity printed/labelled on such pickings, whether could be held to be packed in unit containers?
Held by GST AAR Haryana
(a) The whole (sheep goat) animal carcass in frozen state in different weight and size packed in LDPE bags without mentioning the weight and one or two such LDPE bags further packed in HDPE bags having mention of varying actual total weight of the carcasses packed in each such HDPE bags and supplied to Army shall not qualify as product put up in ‘Unit Container’.
(b) The whole chicken in frozen state in different weight and size packed in LDPE bags and then 20-25 such LDPE bags further packed in HDPE bags having mention of varying actual total weight of birds packed in each such HDPE bags and supplied to Army shall not qualify as product put up in ‘Unit Container’.
(c) The products as mentioned at (a) and (b) above fall under exemption list as per entry no. 10 and 13 of notification No. 2/2017-Integrated tax (Rate) dated 28th June 2017 upto 14th November 2017 and thereafter as per entry No. 9 of Notification No. 44/2017- Integrated Tax (Rate) dated 14th November 2017.
FULL TEXT OF ADVANCE RULING
Factual Background
M/s AOV Agro Food Pvt. Ltd. (‘AOV’) is engaged in slaughtering and processing of poultry/sheep/goal meat and supplies these products to export and domestic market and Army against tender.
M/s AOV supplies to Army sheep/goat meat in carcasses of different weight and size in frozen State and similarly whole chicken of different weight and size is also supplied in frozen State. The packing and dispatch pattern for both mutton and chicken is claimed to be as under:-
(i) Mutton
Each frozen carcass is put in LDPE bag (primary packing) which is not sealed and no weight is mentioned on such LDPE bags. Thereafter, generally two of such LDPE bags are put in HDPE bags (secondary packing) and manually the weight of both the packed carcasses is mentioned on the secondary packing by a marker.
(ii) Poultry
Each frozen chicken is packed in LDPE bag (primary packing) which is not sealed and no weight is mentioned on such LDPE bags. Thereafter, such LDPE bags are put in HDPE bags (secondary packing) which do not contain fixed number of primary packing and also no quantity is mentioned.
In the above backdrop of facts, the applicant has submitted the application for advance ruling on the following:-
The product meat of sheep/goat attracts HSN 0204 and for meat and edible offal of the poultry the four digit HSN code is 0207.
W.e.f 1st July, 2017 to 14th November, 2017 the provision relating to taxability/exemption, under GST law was as under:
Vide schedule-II of notification 1/2017 Integrated Tax (rate) dated 28.06.2017 the product of chapter heading 0204 and 0207, frozen and put in unit containers were taxable @12%.
Vide scheduled- I of notification no. 43/2017 Integrated Tax (rate) dated 14.11 .2017 the product of chapter heading 0204 and 0207, other than fresh or chilled and put in unit container and bearing a registered brand name or bearing a brand name on which actionable claim is available, were made taxable @5%.
In view of the above, it is the applicant’s case that the dispatches made by them in LDPE/HDPE bags, both primary as well as secondary packing do not qualify as unit container and therefore their product is not leviable to tax under GST.
Comment of the Officer under section 98 (1) of the CGST, HGST Act 2017
The Deputy Excise & Taxation Commissioner (ST), Nuh (Mewat) vide his letter no. 577, dated 8.03.2018 as stated that the applicant dealer supplies frozen meat backed in PDPE bags in the shape of unit container. Since the applicant is supplying his goods packed in bags hence it qualifies as supply of goods in unit container.
Record of Personal Hearing
The applicant was afforded a personal hearing for 09.04.2018. The issue raised by the applicant for advance ruling, whether their product can be said to be packed in a unit container to fall under the scope of notification 1/2017 or 2/2017 -Integrated tax (rate) dated 28.06.2017 and further under the scope of notification no. 43/2017 or 44/2017 – Integrated tax (rate) dated 14.11.2017 is covered under the scope of section 97 of CGST/HGST Act 2017 and therefore, the application was admitted.
As regard the classification of their product, the departmental representative had stated that the applicant firm is packing the animal carcasses and the whole chicken in bags for supplying to their customers, i.e. Army, in unit containers and therefore it attracts GST @ 12% upto 14.11.2017 and thereafter @ 5%.
The applicant had strongly argued that the packing done by them cannot be said to be unit containers as it is defined in the explanation to mean a package designed to hold a pre-determined quantity or number which is indicated on such package. The applicant had cited several case laws where the definition of unit container had been discussed and adjudicated.
After hearing and discussion in detail, the decision was reserved which is being released today.
Discussion and finding of the authority
GST is chargeable as reference to value and at applicable rates. For the purpose of building a point of view reference is made to the IGST rate schedule.
W.e.f. from 1st July, 2017 tilI 14th November, 2017
Schedule II of the notification 1/2017 Integrated Tax (rate) dated 28.06.2017 deals with the products which are subject to 12 % GST and entry No. 4 and 7 Which pertain to sheep meat and poultry meat respectively are provided below:-
Schedule-II
