The Andhra Pradesh Authority for Advance Ruling ( AAR ) has held that export of prepackaged and labeled rice upto 25KGs to foreign buyers should levy Goods and Service Tax ( GST ).
The applicant Sarala Foods Private Limited engaged in the business of manufacturing and supply of rice. The applicant supplying rice to customers in pre packaged and labeled packages having quantity upto 25 Kilogram. The applicants have three types of suppliers. Customers from abroad, customers located in India who purchase for the purpose of export on bill to ship basis and customers located in India who purchase rice from for the purpose of exports.
The applicant has sought an advance ruling in respect of Applicability of GST with respect to the Export of pre-packaged and labeled rice upto 25KGs to foreign buyers.
C.S Suman Banzal on behalf of the applicant argued that foreign buyer provides the specification which has to be printed/labeled on the packages of rice which are intended for sale to it. Therefore the applicant procure empty bags from the supplier of packing material and get them printed/labeled according to the specification of the foreign buyer.
The two member bench of Authority of Advance Ruling comprising K Ravi Sankar ( Commissioner of State Taxes ) and B Lakshmi Narayan ( Joint Commissioner of Central Tax ) observed that export of prepackaged and labeled rice upto 25KGs to foreign buyers should levy Goods and Service Tax ( GST ).
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