In re Ramadharsan Thanikachalam (Vee Gee Sundaram and Sons) (GST AAR Kerala)
In the matter of Ramadharsan Thanikachalam, the GST Authority for Advance Ruling (AAR) in Kerala clarified the Goods and Services Tax (GST) implications for the supply of frozen chicken. The applicant, a trader of poultry meat, sought a ruling on the taxability of their product, which is supplied in wholesale bags of 30 kg, each containing 15 smaller packs of 2 kg, clearly labeled “Packed exclusively for Institutional Sale and not for Retail Sale.” The applicant’s business model involves supplying these goods directly to institutional buyers, such as the Indian Army and Taj Hotels, or through distributors who then supply them to these same institutions. A third scenario involved potential sales to non-institutional buyers.
The AAR’s ruling hinged on the interpretation of “pre-packaged and labelled” goods under GST law, as defined by the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011. A key point of contention was whether the applicant’s goods, which are packaged in a pre-determined quantity, would attract the standard 5% GST rate applicable to pre-packaged and labelled frozen chicken. The AAR referred to Rule 3(c) of the Legal Metrology Rules, which provides an exclusion from standard labeling requirements for commodities meant for industrial or institutional consumers. The AAR also cited FAQs issued by the Ministry of Finance, which affirmed that a supply to an institutional consumer is not considered “pre-packaged and labelled” for GST purposes if it meets the criteria for exclusion under the Legal Metrology rules.
