Arjuna (Fictional Character): Krishna, GST Council held its 47th GST Council Meeting at Chandigarh on 28th and 29th June 2022. What are the recommendations by GST Council relating to changes in GST law on food items, grains etc.?
Krishna (Fictional Character): Arjuna, the GST Council Meeting held on 28th and 29th June 2022 recommended that GST was exempted on specified food items, grains etc. when not branded, or right on the brand has been forgone. It has been recommended to exclude exemption for pre-packaged and pre-labelled retail pack of food grains, in terms of Legal Metrology, Act.
Arjuna (Fictional Character): Krishna, what will be taxability on the food items, grains etc. and from when this change will be applicable?
Krishna (Fictional Character): Arjuna,
1) GST rate on branded food grains was taxable @ 5% and will be continued to be taxable @5%.
2) GST Council in the press release has specified that on unbranded food grains which are pre-packaged and pre-labelled retail pack as per Legal Metrology, Act GST will be taxed from 18th July, 2022.
Arjuna (Fictional Character): Krishna, what is prepacked commodity and pre-labelled retail pack as per Legal Metrology Act?
Krishna (Fictional Character): Arjuna, under section 2(1) of The Legal Metrology Act,2009 defines that “pre-packed commodity” means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quality.
Similarly, Pre-labelled retail pack means on any prepacked article there has been written or any mark, stamp print or graphic material pasted.
Arjuna (Fictional Character): Krishna, what is retail pack as per The Legal Metrology (Packaged Commodities) Rules, 2011?
Krishna (Fictional Character): Arjuna, As per The Legal Metrology (Packaged Commodities) Rules, 2011, Retail Package means the packages which are intended for retail sale to the ultimate consumer for the purpose of consumption of the commodity contained therein and includes the imported packages. The provisions of this will not apply to:
1. Packages of commodities containing quantity of more than 25 kg or 25 litre.
2. Packaged commodities meant for industrial consumers or institutional consumers
Arjuna (Fictional Character): Krishna, which type of food grains may be exempted under the proposed amendment?
Krishna (Fictional Character): Arjuna, under the proposed amendment following food grains will be exempt from tax:
1. Food items, grains, etc. that are sold in loose.
2. Food items, grains, etc. which don’t have any mark on the pack.
3. Food grains packed and sold in front of the consumer according to the quantity ordered by him.
4. Unregistered branded food grains not falling under the pre-packed & pre-labelled retail pack terms as specified under the Legal Metrology, Act.
5. Food items, grains etc. of more than 25 kg of packing on which seller has forgone the actionable claim of brand.
Arjuna (Fictional Character): Krishna, what one should learn from this?
Krishna (Fictional Character): Arjuna, as per the proposed change in GST on food items, grains, etc. there will be lot of issues as to what is wholesale, what is retail, what is pre-packed, pre labelled, etc. For this we have to wait till the release of notification, to clear the ambiguity regarding taxability. The amendment may affect food industry daal mill, etc.
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