In re Eastern Zone Industries Pvt. Ltd (GST AAR Odisha)
An Odisha-based company, M/s. Eastern Zone Industries Pvt. Ltd., sought a ruling from the Authority for Advance Ruling (AAR) on the Goods and Services Tax (GST) liability for pre-packaged rice and wheat flour. The core issue was whether GST applies to packs of these commodities weighing more than 25 kg. The company’s current practice involved paying 5% GST on rice in packages up to 25 kg, whether branded or unbranded, but applying a nil rate for unbranded rice in packs above that weight. The applicant specifically requested clarification on whether GST is applicable on pre-packaged and labelled packs over 25 kg that bear a registered brand name.
The AAR’s decision relied on an interpretation of the relevant GST notifications and the Legal Metrology Act, 2009. The authority traced the evolution of the tax law, noting that initially, under Notification No. 1/2017-Central Tax (Rate), GST was levied on goods “put up in a unit container and bearing a registered brand name.” This was later amended by Notification No. 27/2017 to include brand names with an enforceable right. However, a pivotal change occurred with Notification No. 6/2022-Central Tax (Rate), effective from July 18, 2022, which made GST applicable on goods that are “pre-packaged and labelled.” This amendment rendered the concept of a “registered brand name” irrelevant for determining taxability on these specific commodities.
