Case Law Details
In re Sarala Foods Private Limited (GST AAR Andhra Pradesh)
The Goods and Services Tax (GST) applicability on the export of pre-packaged and labelled rice up to 25 kilograms has been a subject of scrutiny under the GST regime in India. In a recent ruling by the Andhra Pradesh Authority for Advance Rulings (AAR) regarding M/s. Sarala Foods Private Limited, clarity has been provided on this matter, which is pivotal for businesses involved in the rice supply chain, especially those exporting rice. This article delves into the details of the case, the questions raised, and the AAR’s verdict, offering a comprehensive understanding of the GST implications on such transactions.
Case Background: M/s. Sarala Foods Private Limited, engaged in the manufacturing and supply of rice, sought an advance ruling on the GST applicability on the export of pre-packaged and labelled rice up to 25Kgs. The application was made under Section 97 of the CGST and APGST Acts, with the company seeking clarity on three distinct types of supply transactions to foreign buyers, exporters for re-export, and direct supply to the exporters’ factories.
Legal Framework: The applicant referred to the amendment in Entry 51 of Schedule I of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, which was further amended by Notification No. 06/2022-Central Tax (Rate) dated 13th July 2022, to argue that GST at 5% (CGST 2.5% + SGST 2.5%) is applicable on the supply of pre-packaged and labelled rice effective from 18th July 2022. This was based on the definition of ‘pre-packaged and labelled’ under the Legal Metrology Act, 2009, which requires such packages to bear declarations under the said Act and its rules.
Questions and Rulings: The AAR was approached with three questions concerning the GST applicability on:
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