Explained: 5% GST on pre-packaged items of up to 25 Kg


NEW DELHI: Consumers will have to pay 5 per cent GST on pre-packed, labelled food items like atta, paneer and curd from today with the GST Council‘s decision coming into force.
This new levy is expected to fuel price inflation of basic consumable items and also widen the GST net as earlier GST levy was limited to branded food items packed in unit containers.
Single packages of unbranded pre-packed and labelled food items like cereals, pulses and flour weighing in excess of 25 kg will be exempt from 5 per cent GST levy.
For example, supply of pre-packed atta meant for retail sale to the ultimate consumer of 25 Kg shall be liable to GST. However, supply of such a 30 Kg pack thereof shall be exempt from levy of GST.
As per the FAQs, pre-packaged and labelled food items (such as pulses, cereals like rice, wheat, flour etc), would fall within the purview of the definition of ‘pre-packaged commodity’ under the Legal Metrology Act, 2009, if such packages contain a quantity up to 25 kilogram (or 25 litres).
“Thus, it is clarified that a single package of these items [cereals, pulses, flour etc.] containing a quantity of more than 25 Kg/25 litre would not fall in the category of pre-packaged and labelled commodity for the purposes of GST and would therefore not attract GST,” the government explained in a release.
Will GST would apply to a package that contains multiple retail packages? For example, a package containing 10 retail packs of flour of 10 Kg each?
Yes, if several packages intended for retail sale to ultimate consumer, say 10 packages of 10 Kg each, are sold in a larger pack, then GST would apply to such supply.
However, a package of say rice containing 50 Kg (in one individual package) would not be considered a pre-packaged and labelled commodity for the purposes of GST levy.
GST would also apply when pre-packaged and labelled package is sold by a distributor/manufacturer to a retailer purchasing food items in packages weighing up to 25 kg/25 litre. However, if for any reason, retailer supplies the item in loose quantity from such package, such supply by the retailer is not a supply of packaged commodities for the purpose of GST levy, the CBIC said.
‘X’ is a rice miller who sells packages containing 20 kg rice but not making the required declaration under legal metrology Act and the Rules made thereunder (although the said Act and the rules requires him/her to make a declaration), would it still be considered as pre-packaged and labelled and therefore be liable to GST?
Yes, such packages would be considered as pre-packaged and labelled commodity for the purposes of GST as it requires making a declaration under the Legal Metrology (Packaged Commodities) Rules, 2011 (rule 6 thereof). Hence, miller ‘X’ would be required to pay GST on supply of such package(s).
However, supply of packaged commodities for consumption by industrial consumer or institutional consumer is excluded from the purview and will not be considered as pre-packaged and labelled for the purposes of GST levy.





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