Pre packaged and pre-labelled retail food items will attract GST rate at par with the branded ones, Chairman of Central Board of Indirect Taxes and Custom (CBIC) Vivek Johri said on Thursday. This means rate could be 5, 12 or 18 per cent.
GST was exempted on specified food items, grains, etc when not branded, or right on the brand has been foregone. Now, GST Council, in its meeting last month, recommended a revision in the scope of exemption to exclude from it pre-packaged and pre-labelled retail pack in terms of Legal Metrology Act, including pre-packed, pre-labelled curd, lassi and butter milk.
The new rates are coming into effect from July 18. However, trade and industry bodies are unhappy with the decision.
“There will be no difference between branded and unbranded retail food items,” Johri told BusinessLine. Also, exemption for items sold in loose, etc will continue. This means pre-packed and pre-labelled curd, lassi and butter milk will attract 5 per cent GST, while ghee and butter will attract GST at the rate of 12 per cent.
Further, there will be clearer definition of ‘pre-packaged’, he said. “Packaging done in front of the consumer will not be a part of the new regime and if food items contained there is exempted, it will continue to do so,” he explained.
Legal Metrology Act
According to the Legal Metrology Act, 2009 “pre-packaged commodity” means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quantity.
Similarly, the Food Safety and Standards (Packaging and Labelling) Regulations, 2011 says, “Prepackaged” or “Pre-packed food”, means food, which is placed in a package of any nature, in such a manner that the contents cannot be changed without tampering it and which is ready for sale to the consumer. Pre-labelled means a pre-packed food item need to have label regarding contents, etc with a registered or unregistered brand.
We have recently released the 7th Edition (May, 2022) of our book on Goods and Services Tax, titled, “GST LAW AND COMMENTARY – WITH ANALYSIS AND PROCEDURES”, updated with the Finance Act, 2022 in a set of 4 Volumes. We thank you all for the support and your enduring response.
Have a look at the complete tour of the Book at: https://cutt.ly/nF6O0oN
Order your copy now and be a part of the GST learning excursion in the most comprehensive and lucid form !!
For more details and purchase online at: https://cutt.ly/RFMox8D