Advance Ruling on GST Applicability for M/s Raibag Taluk MSPC Supplying Food Products to Childcare Centers (Aanganwadis)

Summary: M/s RAIBAG TALUKA MSPC, a society supplying supplementary food products to Anganwadi centers in Karnataka, sought an advance ruling on GST applicability. The society requested clarification on whether their activities qualify for GST exemptions under various notifications and circulars, including Notification No. 12/2017-Central Tax (Rate) and Circular No. 149/05/2021-GST. The main product in question, ‘Pushti,’ a packaged food blend, was examined for its tax status. The ruling determined that the society’s supply of goods does not qualify for exemptions under the notifications or circulars in question, which primarily address services rather than goods. Specifically, ‘Pushti’ is exempt from tax under entry No. 78 of Notification No. 02/2017-Central Tax (Rate) because it does not meet the criteria for pre-packaged and labeled products. Thus, the society’s operations and products are not eligible for the mentioned exemptions, clarifying the GST implications for their activities.

Advance Ruling on GST Applicability for M/s RAIBAG TALUK MSPC Supplying Food Products to Childcare Centers (Aanganwadis)

M/s RAIBAG TALUK MSPC, a society registered under the Karnataka Societies Registration Act, 1960, has sought an advance ruling under the CGST Act, 2017, and the KGST Act, 2017. This society is involved in providing supplementary food products to Anganwadi centers via the Child Development Project Office (CDPO). They are requesting clarification regarding the applicability of different GST notifications and circulars to their activities and products.

Important Topics Highlighted

1. Eligibility for GST Exemption under Notification No. 12/2017-Central Tax (Rate):

• Is the applicant qualified for GST exemption according to S. No. 66 clause (b)(ii) of this notification?

2. Applicability of Circular No. 149/05/2021-GST:

• Does the exemption detailed in Circular No. 149/05/2021-GST, which covers catering services provided to educational institutions (such as Aanganwadis), apply in this case?

3. Clarification No: KSA/GST.CR-05/2019-20:

• Is this specific state-issued clarification relevant to their operations?

4. Taxability of the Product ‘Pushti’:

• Is ‘Pushti’, their main product, classified as “pre-packaged and labeled,” thus making it subject to taxation under certain GST notifications?

Acceptability

The application is considered acceptable because it aims to clarify tax liability and the relevance of notifications, which fall under the scope of advance ruling according to Section 97 of the CGST Act, 2017.

Submissions

“Pushti” is a powdered blend consisting of sugar, groundnuts, fried gram, green gram, soya, and rice. It is provided exclusively to CDPO and is not available for purchase in the open market. The product is packaged and labeled with the notice “Free supply and not for sale.” According to a previous ruling, ‘Pushti’ is classified under HSN code 1106. The society provides a range of items to CDPO for distribution to Anganwadi centers, including groundnuts, green gram, oil, salt, and more.

Analysis and Findings

1. Exemption under Notification No. 12/2017-Central Tax (Rate):

• Finding: This notification applies to services provided to educational institutions. Since the applicant is involved in supplying goods rather than services, this notification does not apply.

2. Circular No. 149/05/2021-GST:

• Finding: This circular provides clarity on the GST exemption for catering services to educational institutions. As the applicant deals with the supply of goods, this circular is not relevant.

3. Clarification No: KSA/GST.CR-05/2019-20:

• Finding: This state-issued clarification, like the circular, addresses services and is not applicable to the applicant’s supply of goods.

4. Taxability of ‘Pushti’:

• Finding: ‘Pushti’ does not qualify as pre-packaged and labeled according to the Legal Metrology Act, and therefore does not fall under the GST categories for taxed products.

Ruling

• Exemption under S.No.66 clause (b)(ii) of Notification No. 12/2017-Central Tax (Rate): This exemption does not apply to the applicant.
• Applicability of Circular No. 149/05/2021-GST: This circular is not applicable to the applicant.
• Clarification No: KSA/GST.CR-05/2019-20: This clarification does not apply to the applicant.
• Taxability of ‘Pushti’: ‘Pushti’ is exempt from tax according to entry No. 78 of Notification No. 02/2017-Central Tax (Rate).

Conclusion

The applicant’s products and operations do not qualify for the exemptions or specific tax treatments outlined in the referenced notifications and circulars, as their activities are categorized as the supply of goods rather than services. This decision clarifies the tax implications for their primary product, ‘Pushti’.