No GST on Supply of 1kg Red Gram Dal Secondary Packing to 50kg Bags to Civil Supplies Corporations: AAR [Read Order]

The Andra Pradhesh Authority for Advance Ruling (AAR) has held that no Goods and Service Tax (GST) would be applicable on the supply of 1kg red gram Dal secondary packing to 50kg bags to civil supplies corporations.

The Applicant Seetharamanjaneya dal and fried gram mill was engaged in the business pulses and dals. Applicant had a facility in his mill to convert pulses into dals.

The Andhra Pradesh State Civil Supplies Corporation Limited had invited tenders for the supply of red gram dal, in 1 kg packet form with secondary packaging in 50 kg PP bags and the applicant was a successful bidder and supplying the red gram dal to the corporation adhering to the guidelines issued by the corporation regarding packing and printing of label.

The applicant has sought advance ruling as to whether the supply of 1kg packing red gram dal secondary packing in 50 kg bag to the AP State Civil Supplies Corporation Limited, Vijayawada as per the design and label given by the corporation with a prior agreement attracts GST.

The Authority Bench of K. Ravi Sankar, (Commissioner of State Tax Member) and RV Pradhamesh Bhanu, (Joint Commissioner of Central Tax) observed that first and foremost condition of taxability was that the commodity should have been a pre-packed commodity which meant that the commodity was not packed for any specific known buyer. In the Instance case the applicant was packing the commodity at the behest and at the specific instructions of the buyer, AP State Civil Supplies Corporation Limited.

“It was clearly evident from the package that the AP State civil had made very clear instructions as to the colour, theme, transparency and the details to be printed on the package. Thus, the commodity is packed for retail sale for any buyer who may purchase at a later point, but it is packaged to a specific buyer. Thus, the first and foremost condition of taxability is not satisfied, hence there is no question of taxability of the commodity in the instant case. In view of this the discussion as primary/secondary packaging or Institutional supply is nothing but infructuous,” the Bench further observed.

To Read the full text of the Order CLICK HERE

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