The Central Board of Indirect Taxes and Customs on Sunday said single packages of food items such as cereals, pulses and flours weighing up to 25 kg will be liable to five per cent under the new Goods and Services Tax (GST) rates. It further states that any food item which is above the prescribed weight will be treated as packaged ‘prepackaged and labeled’.
GST will not be applicable on loose quantity of an item purchased from a manufacturer or distributor in a pack of 25 kg being sold by a retailer.
The CBIC on Sunday night issued a set of frequently asked questions (FAQs) on the implementation of GST on ‘pre-packaged and labeled’ goods, just a day before the implementation of five per cent GST on such items.
In respect of food articles (such as cereals like pulses, rice, wheat, flour etc.), the supply of specified pre-packaged food items falls within the definition of ‘pre-packaged commodity’ under the Legal Metrology Act. , 2009, if such pre-packaged and labeled packages contain a volume of up to 25 kg (or 25 litres).
“It is clarified that a package of these commodities (cereals, pulses, flour etc.) having a volume exceeding 25 kg/25 litres, shall not come under the category of pre-packaged and labeled commodity for the purposes of GST. Therefore will not attract GST,” it said.
CBIC said supply of pre-packaged flour for retail sale to the end consumer of 25 kg would be liable to GST. However, supply of such 30 kg pack will be exempted from GST.
The board also said that GST would be applicable on a package that includes multiple retail packages, for example, a package containing 10 retail packs of 10 kg of flour, the CBIC said.
It said that for the purpose of GST, “pre-packaged commodity” shall mean a commodity which, without the presence of a buyer, is put in a package of any nature, whether sealed or not, so as to contain Pre-determined quantity of the product contained. Any such supply which requires declaration under the Legal Metrology Act will attract GST.
Read also | HDFC Bank releases Q1 results, net profit up 21% to Rs 9,579 crore
Read also | Air travel likely to get cheaper due to 2.2% reduction in jet fuel rates
latest business news