5% GST on prepackaged items up to 25-kg

The new GST rate, in pursuance of recommendations made by the GST Council in its 47th meeting last month, is coming into effect from 18th july 2022 as has been

notified vide notification No. 6/2022-Central Tax (Rate), dated the 13th of July, 2022, and the corresponding notifications for SGST and IGST.

The Central Board of Indirect Taxes and Customs (CBIC) on Sunday issued a list of FAQs on GST applicability on pre-packaged and labelled products, clarifying that single packages of food items like cereals, pulses and flour weighing up to 25 kg will be considered as 'prepackaged and labelled', and liable to 5 per cent GST.

However, items, which are pre-packaged above 25 Kg, in a single packet will be exempt from GST.

It also clarified that if a retail shopkeeper supplies in loose quantity the item bought from a manufacturer or a distributor in a 25-kg pack, such sale to consumers will not attract GST.

In the context of food items (such as pulses, cereals like rice, wheat, flour etc), the supply of specified pre-packaged food articles would fall within the purview of the definition of 'pre-packaged commodity' under the Legal Metrology Act, 2009, if such pre-packaged and labelled packages contained a quantity up to 25 kilogram (or 25 litres).

"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," it said.

The CBIC said the supply of pre-packed atta meant for retail sale to 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.

The board also said that GST would apply on a package that contains multiple retail packages, for example a package containing 10 retail packs of flour of 10 kg each, the CBIC said.

It said for the purpose of GST, ?pre-packaged commodity? would mean 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 quantity. Any such supply which requires declaration under the Legal Metrology act would attract GST, it said.

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