GST on Pre-Labelled and Pre-packaged goods (GST Update 13.07.2022)

GST on Pre-Labelled and Pre-packaged goods (GST Update 13.07.2022)

There are various misunderstanding as to levy of GST on common food products including wheat, rice etc. It is being said that this move by government will increase the price of essential commodities thus affecting common man. Various mandi have held protest and have even closed mandi for a day.

Government have relased a notification on 13th July,2022 levying GST on various commodities. GST have not been levied on all commodities as being said. Only pre-lablelled and packaged commodities will attract GST. This have been clarified by Tax Research Unit of Ministry of Finance on 17th July, 2022 by FAQ's.

Prior to 18th July, 2022, GST was applied on goods bearing registered brand name on which enforceable right in a court was available. Now, GST have been made applicable on "pre-packaged and labelled" goods which attract provisions of Legal Metrology Act.

'Pre-packaged and labelled' have been defined in Legal Metrology Act. As per the said, two conditons are reqiuired to attract GST:
  1. It is Pre-packaged.
  2. It is required to have declaration under above act.
If such commodities do not require declartion under Legal Metrology Act, GST is not applicable. It is necessary to understand on which goods declaration is not required i.e. GST will not be levied.
  1. Package containing quantity more 25 kg/litre do not require declaration. Hence no GST will be applicable on mandi/ wholeseller etc where goods are sold in package of more than 25 kg even if some logo, mark, label etc is affixed on package. For example, if pre-packed flour of 30 kg is being sold having some mark/brand, no GST will be applicable.
  2. If goods are sold directly by manufacturer to whole sale delaer, no GST will be charged.
GST is being levied only on retail sale by Department store, where goods are sold in package form having their brand name. If same is being sold in loose form, no GST will be applicable.

Therefore, this move by government is not going to affect commoon people like farmers or like mandi's / wholeseller who deals in bulk quantity of more than 25 kg. GST is still not applicable as earlier.

    • Related Articles

    • GST Updates (July '22)

      Central Board of Indirect Tax and Custom (CBIC) has released various notifications enforcing various recommendations of 47th GST Council meeting held on 29th June 2022 and related to E-invoicing. Applicable from 18.07.2022 RELATED TO GOODS Rates on ...

    • Understanding GST on Goods Transport Agency (GTA) Services (from recipient perspective)

      Change w.e.f 18.07.2022 Categories of transporters: A transporter who are GTA and not charging GST on Bills. A transporter who are GTA and charging 5% or 12% GST on Bills. A transporter who is not a GTA.  GST Treatment for GTA, whether registered or ...

    • GST on Residential Property

      As per the new rules w.e.f. July 18, 2022, if the tenant of the residential property is GST-registered, he has to pay 18% GST irrespective of the fact that the landlord is GST-registered or not. The payment of the GST shall be made under the reverse ...

    • E-Invoicing : Decoding the Mysteries for Small Traders / MSME

      Applicability: W.e.f. 1st October, 2022: If turnover on a single PAN exceeds Rs 10 Cr in any financial year from FY 17-18. For ex: Mr. A has following turnovers: Financial Year Turnover (in ₹ Cr) 18-19 15 19-20 8 20-21 5 21-22 6 As Turnover in FY ...

    • Whether IGST or CGST/SGST to be paid on GTA services?

      Confusion of Charging CGST/SGST or IGST? Section 12 of IGST Act states that the Place of Supply for services by way of transportation of goods, including by mail or courier would be as follows: Recipient Place of Supply Registered Person Location of ...