Pre- Packaged and Labelled export of shrimps up to 25 kgs attracts 5% GST: AAR [Read Order]

The Andhra Pradesh Authority of Advance Ruling ( AAR ) held that up to 25 kgs of exported processed frozen shrimp packed in pre-packaged and labelled pouches or boxes attracts 5% Goods and Service Tax ( GST ).

The Applicant, M/s Sandhya Aqua Exports Private Limited, Visakhapatnam, was engaged in the business of processing and exporting of shrimp, had filed an application in FORM GST ARA-01 under Section 97(1) of the Central Goods and Services Tax Act, 2017 and AP Goods and Services Tax Act, 2017.

The applicant’s business involved processing raw shrimp using primary packaging which included individual pouches or boxes, weighing between 250 grams and 2.5 kilograms and secondary packaging which included master cartons up to 25 kilograms containing the primary packages. Both types of packaging could be printed with product details or be plain, based on buyer specifications.

The question raised by the applicant before the authority was whether the export of these processed frozen shrimps (HSN 0306), packaged in individual printed or plain pouches/boxes and subsequently placed inside a printed master carton of up to 25 Kilogram each would attract GST liability?

This query was resolved by the authorities which invited the reference of GST and made it applicable on supply of “pre-packaged and labelled” goods through the Notification no 06/2022 dated 13th July 2022.

The Bench comprising Sri. K. Ravi Sankar, Commissioner of State Tax (Member) and Sri. B. Lakshmi Narayana, IRS, Additional Commissioner of Central Tax (Member) observed and reviewed the matter.

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The Bench considered provisions of the Central Goods and Services Tax Act, 2017 (CGST Act,2017), the Andhra Pradesh Goods and Services Tax Act, 2017, and the Legal Metrology Act, 2009, along with relevant rules and clarifications. The Bench noted that the expression pre-packaged and labelled is defined under section 2 clause (l) of the Legal Metrology Act, 2009 as pre- packaged commodity.

The Bench found that individual inner packaging which ranges from 250 grams to 2.5 kilograms, as being printed had pre-determined quantity which falls within the ambit of ‘pre-packaged and labelled' goods meant for retail sale irrespective of the fact whether the outer packaging is printed or not, clarifying GST became liable to such packages already.

The Bench also observed that neither notification no 6/2022 dated 13.07.2022, nor the Legal Metrology Act 2009 had made any difference with regard to applicability of GST on exports of goods or pre packed commodities for export.

Therefore, where the quantity involved was 25Kgs or less in respect of specified commodities including shrimps (HSN 0306) would mandatorily get covered within the ambit of Legal Metrology Act, 2009 and its rules.

After observing and considering the findings, the Bench concluded that 5% GST would be applicable on the supply of “pre-packaged and labelled” shrimps with capacity up to 25 kgs irrespective whether it is domestic supply or for export outside the country.

Thus, the applicant's queries received an Affirmative ruling.

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