GST Exemption on Frozen Seafood: West Bengal AAR Ruling

Authority for Advance Ruling (AAR), West Bengal, examined the GST applicability on the supply of frozen seafood, such as prawns and fish, to industrial consumers in non-retail packs. The applicant, Sravanti Lahiri, sought clarification on whether such supplies qualified for GST exemption under Notification No. 7/2022-CTR, read with the Legal Metrology (Packaged Commodities) Rules, 2011. The applicant argued that since these products were not classified as “pre-packaged and labeled” under GST law, they should be exempt from tax.

The revenue department cited the FAQ issued by CBIC on 17th July 2022, which clarified that packaged commodities meant for industrial or institutional use, when excluded from the purview of the Legal Metrology Act under Rule 3(c), would not attract GST. However, if the exclusion criteria were not met, a 5% GST rate would apply. The department confirmed that such exemption would depend on the nature of the supply and its compliance with Rule 3(c) of the Legal Metrology Rules.

Despite multiple opportunities for a personal hearing, the applicant failed to appear or provide documentary evidence supporting her claim. The AAR noted that the applicant had been given ample chances to present her case but had not availed them. Due to the absence of any conclusive evidence, the AAR refrained from issuing a ruling on whether the supply of frozen seafood in industrial packs qualified for GST exemption.

This ruling underscores the importance of substantiating claims with documentary proof in advance ruling proceedings. The decision aligns with previous judicial precedents, where courts and tribunals have ruled that exemptions or concessions must be backed by proper evidence. In the absence of compliance with the prescribed conditions, taxation under GST law remains applicable. The case remains unresolved, leaving businesses seeking clarity on similar matters to ensure adequate documentation for their claims.