In re Olam Agri India P Ltd (GST AAR Gujarat)
The Gujarat Authority for Advance Ruling (AAR) has addressed a series of questions posed by Olam Agri India P Ltd, a company engaged in the export of agricultural produce, specifically rice. The core of the applicant’s query revolves around the Goods and Services Tax (GST) implications on the export of pre-packaged and labelled rice, particularly concerning different supply chain models and tax rates.
Key Issues and Ruling
Olam Agri India P Ltd sought clarity on whether GST is leviable on exports of pre-packaged and labelled rice (up to 25 kgs) to foreign buyers, and similar supplies made on a ‘bill to ship to’ basis to domestic exporters. They also inquired about supplies made to an exporter’s factory for subsequent export, and the implications of procuring goods at a concessional GST rate (0.1%) and then exporting them at a 5% rate.
The AAR clarified that GST at 5% would be applicable on the export of pre-packaged and labelled rice up to 25 kgs to foreign buyers if the applicant opts to export on payment of Integrated Goods and Services Tax (IGST). This is in line with Entry No. 51 of Schedule I of Notification No. 1/2017-CT (Rate), which stipulates a 5% GST rate for pre-packaged and labelled rice. The AAR emphasized that this rate applies if the exported rice package meets the definition of ‘pre-packaged and labelled’ as defined under the Legal Metrology Act, 2009.
