The Haryana Authority for Advance Ruling (AAR) ruled that Good and Services Tax (GST) is applicable on export of pre-packaged and labelled rice up to 25kg.
Also ruled that GST is applicable on supply of pre-packaged and labelled rice up to 25 Kgs, to exporter on “bill to ship to” basis i.e., bill to exporter and ship to customs port. Exporter ultimately exports the rice to foreign buyers.
The applicant, M/s D D International Pvt Ltd, engaged in the business of manufacturing and supplying of rice and we are supplying rice to customers in pre-packaged and labelled packages, having quantity up to 25 kg.
As per the submissions, they have 3 types of Customers sales/supplies are executed details. They are i) Customers located abroad (“foreign buyer supplies”), ii) Customers located in India who purchase rice from us for the purpose of exports on “bill to ship to” basis (“Exporter”), iii) Customers located in India who purchase rice from us for the purpose of exports (“Exporter”).
The applicant has sought advance ruling on the GST rates of the supplies mentioned above.
The bench acknowledged the proper officer’s comments that, according to Notification No. 06/2022 — Central Tax (Rate) dated July 13, 2022, GST @5% is applicable on supplies of pre-packaged and labelled rice up to 25 kg, provided that both of the following conditions are met: i) It is pre-packaged and labelled; and ii) It is required to bear the declarations required by the Legal Metrology Act, 2009 (l of 2010) and the rules made thereunder.
As a result of the Proper Officer’s comment’s support, the Sunder Lal and Kumud Singh bench ruled that GST is applicable to all supplies of pre-packaged and labelled rice bags made to foreigners.
In addition, the bench noted that regardless of whether the rice is being sold for internal use or export, 5% GST will be applied if it is being delivered in pre-packaged and labelled bags with a capacity of up to 25 kg.
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