After issue of GST notification no. 6/2022 dated 13th July, 2022, there was a doubt that whether pre-packaged and labelled rice upto 25 KG can be exported with payment of IGST.
The answer to question has been duly given by Haryana Authority for advance Ruing vide its order dated 02.12.2022. Main extract of the advance ruling are as under:
Discussion and Finding:
It is observed that the legislature intension is that the rice in packets of up to 25 kg which are duly pre packaged and labelled as per Legal Metrology Act 2009 (1 of 2010). and the rules made thereunder is a taxable event and not an exempted/nil rated supply. Besides Ministry of Finance, Government of India has clarified the applicability of GST on pre packaged and labelled goods through FAQ which were uploaded online on 18th July 2022 w.r.t the notification no. 6/2012-CT (rate). Though FAQs are not binding on the statutory authorities but they have a persuasive value for any authority while interpreting the legal provisions. From the perusal of the said notification and subsequent clarification on it, it can be said that in the present matter if supplied goods are the pre packaged and labelled and in the packages of less than or equal to 25 kg in quantity are taxable further the scope of supply under the GST act 2017 is an all-encompassing event and only goods and services which are categorically exempted /Nil rated under the act are outside the purview of taxability. in the light of this discussion, the authority is of considered view that the transactions undertaken by the applicant falls within the purview of the scope of supply and attracts levy of tax as applicable under the CGST/HGST/IGST Act, 2017
|1||Whether GST would be applicable on the export of pre-packaged and labelled rice up to 25 kgs to a foreign buyer?||Yes|
|2||Whether GST would be applicable on the supply of pre-packaged and labelled rice up to 25 kgs to an exporter on the ‘bill to ship to’ basis i.e., bill to exporter and ship to customs port?||Yes|
|3||Whether GST would be applicable on supply of pre-packaged and labelled rice up to 25 kgs to the factory of exporter||Yes|
Effect of the above order will be as under:
1. GST would be applicable on the suppliers of exporter who are supplying pre-packaged and labelled rice to exporter irrespective of the fact that rice is being supplied to exporter ‘s factory or direct to customs port.
2. Exporter of rice can avail GST refund on export of pre-packaged and labelled rice upto 25 KG bags under route of export with payment of IGST.