Dairy GST

GST Council notification on pre-packaged, pre-labeled dairy & agricultural products

GST Council notification on pre-packaged, pre-labeled dairy & agricultural products

GST Council notification on pre-packaged, pre-labelled dairy & agricultural products.

Prepare to spend extra not only for pre-packaged and labelled curd, lassi, wheat, rice, and so on but also for cutlery. Along with others, the Finance Ministry has announced GST rates for numerous commodities supplied as pre-packaged and pre-labelled.

Tax officials have underlined that dairy and agricultural products sold loose or packaged in front of customers would remain exempt. Also Read | Tomar told agro-chemicals industry that he would talk to FM about cut GST on pesticides.

The notifications are based on the GST Council‘s recommendations from its meeting last month in Chandigarh. The council resolved to abolish exemptions on numerous agricultural and dairy goods, as proposed by a Ministerial Group (GoM). Previously, GST was avoided on some food goods, cereals, and so on when they were not branded or when the right to the brand was waived.

The Council proposed revising the extent of the exemption to exclude pre-packaged and pre-labeled retail packs under the Legal Metrology Act. With this, the distinction between branded and unbranded commodities for many dairy and agricultural products has been eliminated. Both will now be charged the same prices as long as the unbranded products are pre-packaged and labelled.

What is said in the notice?

The ‘expression ‘pre-packaged and labelled’ means a ‘pre-packaged commodity’ as defined in clause (l) of section 2 of the Legal Metrology Act, 2009, where the package in which the commodity is pre-packed or a label securely affixed thereto is required to bear the declarations under the provisions of the act,’ according to the notification.

According to the Legal Metrology Act, a ‘pre-packaged commodity is one that is placed in a container of any kind, whether sealed or not, without the purchaser’s presence, such that the product contained inside has a pre-determined amount.

Experts, on the other hand, want an explanation. According to Aditya Singhania, Founder of Singhania’s GST Consultancy & Co, the Legal Metrology Act requires a declaration to be provided for both retail (less than 25 kg weight) and wholesale (above 25 kg weight). Since the news release only referenced retail sales, the question is if disclosure on parcels weighing more than 25kgs is also necessary. ‘In my opinion, absolutely, according to definition,’ Singhania replied, adding that the government should clarify.

Also Read | GST on Agriculture: seeds are not “agricultural produce”, should be subject to GST-AAR.

The hospital ward

Another announcement specifies the process for terminating the exemption for non-ICU rooms at a hospital. It is stated here that a 5% GST will be levied on ‘services provided by a clinical establishment by way of providing room [other than Intensive Care Unit/Critical Care Unit/Intensive Cardiac Care Unit/Neonatal ICU] with room charges exceeding 5,000 per day to a person receiving health care services.’ There was intense lobbying to put the levy on hold or possibly repeal it.

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