GST WEEKLY UPDATE : 16/2022-23 (17.07.2022)

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  1. Pre-packaged and labled edible items liable for the GST @5% w.e.f. 18/07/2022:

The edible items taxable @ 5%/12% if these items are *pre-packaged and labled* i.e. items are placed in package, whether sealed or not, carrying *pre-determined quantity.

Pre-packaged:– The items must be placed in a package without the purchaser being present to be called pre-packaged. Further, package or its label must be required to bear declarations under Legal Meteorology Act to levy GST.

Retail sale package– -S.18 of Legal meteorology Act 2009 mandates bearing of declaration as per Rules. Rule 6 read with Rule 3* of Legal Meteorology Packaged Commodity Rules 2011 mandates declaration for packages intended for retail sale* i.e. sale, distribution or delivery of commodity through retails shops for consumption by an individual or group of individuals.

Whole sale package– Rule 24 of Legal Meteorology Rule 2011* every wholesale package shall bear declarations under Legal Meteorology Act and hence gst shall be charged. Whole Sale Packages are packages intended for sale, distribution or delivery to intermediary and Institutional consumers and are Either comprised of number of retail packages and is not intended for sale direct to single consumer or Contain commodity in bulk to enable sale to consumer in smaller quantity. Packages containing ten or more retail packages, duly labeled are also whole sale packages.

Exemption from declarations under Rule 26 of Metrology Rules

– Packages containing commodities weighing/ measuring 10 gms/ 10 Mls or less from bearing of declaration.

-Fast Food Items packed by Restaurants and Hotels.

-Specified Drug Formulations Agriculture form produce in packages above 50 kgs.

-Edible items -10g/10mls or less and Edible items more than 25 kgs/25 ltrs  -do not require declaration and exempted from GST(clarity from the CBIC awaited)

  1. GTA: Provisions from 18.7.2022: 
  • Services of Goods Transport Agency (GTA) in relation to transportation of goods (including used house hold goods for personal use) supplied by a GTA where,-

(a) GTA does not exercise the option to itself pay GST on the services supplied by it; Tax Rate:- 5%

Note:- The credit of input tax charged on goods and services used in supplying the service has not been taken.

(b) GTA exercises the option to itself pay GST on services supplied by it.

Tax Rate:- 5% or 12%

In respect of supplies on which GTA pays tax at the rate of 2.5%, GTA shall not take credit of input tax charged on goods and services used in supplying the service.

The option by GTA to itself pay GST on the services supplied by it during a Financial Year shall be exercised by making a declaration in Annexure V on or before the 15th March of the preceding Financial Year:

Provided that the option for the Financial Year 2022-2023 shall be exercised on or before the 16th August, 2022

  1. Exemption under GST on the service of renting of residential dwelling for use as residence shall be restricted where the recipient of such service is not registered under GST. Where the recipient of such service is registered under GST, the service shall be liable to GST @ 18%. However, the tax shall be paid by the recipient under reverse charge:

  1. The CBIC vide Notification No. 06/2022-Central Tax (Rate) dated July 13, 2022has issued amendments in the Goods Rate Notification in the following manner:

Schedule I – 2.5%

S. No.  Chapter/ Heading Description of Goods GST rate applicable w.e.f 18.07.2022
91A 1701 or 1702 Jaggery of all types including Cane Jaggery (gur), Palmyra Jaggery, pre-packaged and labelled; Khandsari Sugar, pre-packaged and labelled. 5%
98A 1904 Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira, parched rice, commonly known as khoi, parched paddy or rice coated with sugar or gur, commonly known as Murki, pre-packaged and labelled 5%
181B 3006 Ostomy appliances including pouch or flange, stoma adhesive paste, barrier cream, irrigator kit, sleeves, belt, micro-pore tapes. 5%
255A 9021 Orthopaedic appliances, such as crutches, surgical belts, and trusses; Splints and other fracture appliances; artificial parts of the body; other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; intraocular lens other than hearing aids 5%

 Schedule II – 6%

S. No. Chapter / Heading Description of Goods GST rate applicable w.e.f 18.07.2022
16 0804 Dates (soft or hard), figs, pineapples, avocados, guavas , mangoes (other than mangoes sliced, dried) and mangosteens, dried 12%
65 3006 Pharmaceutical goods specified in Note 4 to this Chapter i.e. Sterile surgical catgut, similar sterile suture materials (including sterile absorbable surgical or dental yarns) and sterile tissue adhesives for surgical wound closure; sterile laminaria and sterile laminaria tents; sterile absorbable surgical or dental haemostatics; sterile surgical or denatal adhesion barriers, whether or not absorbable; Waste pharmaceuticals, other than contraceptives and Ostomy appliances 12%
85B 4107 Leather further prepared after tanning or crusting, including parchment-dressed leather, of bovine (including buffalo) or equine animals, without hair on, whether or not split, other than leather of heading 4114 12%
85C 4112 Leather further prepared after tanning or crusting, including parchment-dressed leather, of sheep or lamb, without wool on, whether or not split, other than leather of heading 4114 12%
85D 4113 Leather further prepared after tanning or crusting, including parchment-dressed leather, of other animals, without wool or hair on, whether or not split, other than leather of heading 4114 12%
85E 4114 Chamois (including combination chamois) leather; patent leather and patent laminated leather; metallised leather 12%
85F 4115 Composition leather with a basis of leather or leather fibre, in slabs, sheets or strip, whether or not in rolls; parings and other waste of leather or of composition leather, not suitable for the manufacture of leather articles; leather dust, powder and flour 12%
125A 4905 Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed 12%
176B 6815 Fly ash blocks with 90 per cent. or more fly ash content; Fly ash blocks 12%
194A 8419 12 Solar water heater and system 12%
197 8433 Harvesting or threshing machinery, including straw or fodder balers; grass or hay mowers; parts thereof 12%

 Schedule III – 9%

S. No. Chapter / Heading Description of Goods  
30A 2706 Tar distilled from coal, from lignite or from peat and other mineral tars, whether or not dehydrated or partially distilled, including reconstituted tars 18%
54C 3215 All Goods, including printing ink, writing or drawing ink and other inks, whether or not concentrated or solid, fountain pen ink, ball pen ink 18%
148 4811 Paper, paperboard, cellulose wadding and webs of cellulose fibres, coated, impregnated, covered, surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size, other than goods of the kind described in heading 4803, 4809 or 4810 18%
157B 4907 Unused postage, revenue or similar stamps of current or new issue in the country in which they have, or will have, a recognised face value; stamp-impressed paper; banknotes; cheque forms; stock, share or bond certificates and similar documents of title (other than Duty Credit Scrips); Cheques, loose or in book form 18%
182D 6815 Articles of stone or of other mineral substances (including carbon fibres, articles of carbon fibres and articles of peat), not elsewhere specified or included other than Fly ash bricks; Fly ash aggregates; Fly ash blocks 18%
301A 8211 Knives with cutting blades, serrated or not (including pruning knives), other than knives of heading 8208, and blades therefor 18%
302A 8214 Other articles of cutlery (for example, hair clippers, butchers’ or kitchen cleavers, choppers and mincing knives,); manicure or pedicure sets and instruments (including nail files) 18%
302B 8215 Spoons, forks, ladles, skimmers, cake-servers, fish-knives, butter-knives, sugar tongs and similar kitchen or tableware 18%
317A 8413 (a) Concrete pumps 8413 40 00; (b) other rotary positive displacement pumps 8413 60 (c) Power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps 18%
317C 8414 20 10 Bicycle pumps 18%
317D 8414 90 12 Parts of air or vacuum pumps and compressors of bicycle pumps 18%
328A 8433 Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce, other than machinery of heading 8437; parts thereof 8433 90 00 18%
328B 8434 Milking machines and dairy machinery 18%
329A 8437 Machines for cleaning, sorting or grading, seed, grain or dried leguminous vegetables; machinery used in milling industry or for the working of cereals or dried leguminous vegetables other than farm type machinery and parts thereof 18%
371A 84 or 85 E-waste

Explanation. – For the purpose of this entry, E-waste means electrical and electronic equipment listed in Schedule I of the E-Waste (Management) Rules, 2016 (published in the Gazette of India vide G.S.R. 338 (E) dated the 23rd March, 2016), whole or in part if discarded as waste by the consumer or bulk consumer”;

18%
376AC 8509 Electro-mechanical domestic appliances, with self-contained electric motor, other than vacuum cleaners of heading 8508 18%
390 8539 Electrical Filament or discharge lamps including sealed beam lamp units and ultra-violet or infra-red lamps; arc lamps 18%
406A 8807 Parts of goods of heading 8801 18%
413 9017 Drawing, marking-out or mathematical calculating instruments (for example, drafting machines, pantographs, protractors, drawing sets, slide rules, disc calculators); instruments for measuring length, for use in the hand (for example, measuring rods and tapes, micrometers, callipers), not specified or included elsewhere in this chapter 18%
438A 9405 Luminaires and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included other than kerosene pressure lantern and parts thereof including gas mantles; hurricane lanterns, kerosene lamp, petromax, glass chimney, and parts thereof; 18%

 

Schedule VI – 0.125%

S. No. Chapter / Heading Description of Goods  
1 7102 Rough diamonds or simply sawn diamonds, industrial or non-industrial 0.25%
3 7104 Synthetic or reconstructed precious or semiprecious stones other than diamonds, whether or not worked or graded but not strung, mounted or set; ungraded synthetic or reconstructed precious or semiprecious stones other than diamonds, temporarily strung for convenience of transport; synthetic or reconstructed diamonds, unworked or simply sawn or roughly shaped 0.25%

 Schedule VII – 0.75%

S. No. Chapter / Heading Description of Goods  
1 7102 Rough diamonds or simply sawn diamonds, industrial or non-industrial 1.5%
3 7104 Synthetic or reconstructed precious or semiprecious stones other than diamonds, whether or not worked or graded but not strung, mounted or set; ungraded synthetic or reconstructed precious or semiprecious stones other than diamonds, temporarily strung for convenience of transport; synthetic or reconstructed diamonds, unworked or simply sawn or roughly shaped 1.5%

Description of Services New Rate
Job work for processing of hides, skins, leather, making of leather products including footwear, and clay brick manufacturing 12%
Earthwork works contracts and sub-contracts to the Central and state governments, Union Territories and local authorities 12%
Services by foreman to chit fund 18%
Works contract for railways, metro, roads, bridges, effluent treatment plant, crematorium, etc. 18%
Works contract and sub-contract to the Central and state governments, local authorities for canals, dams, pipelines, plants for water supply, historical monuments, educational institutions, hospitals, etc 18%
Transport of goods and passengers by ropeways (with ITC of services 5%
Renting of truck or goods carriage including the fuel cost 12%
Air transportation of passengers to and from north-eastern states and Bagdogra now restricted to economy class Condition added
Transportation by rail or a vessel of railway equipment and material, storage or warehousing of commodities attracting tax such as copra, nuts, spices, jaggery, cotton, etc, fumigation in a warehouse of agri produce, services by RBI, IRDA, SEBI, FSSAI, and GSTN, renting of residential dwelling to GST-registered businesses, and services by the cord blood banks for preserving stem cells Applicable rate
Room rent (excluding ICU) exceeding Rs.5,000 per patient day taxed without ITC 5%
Common bio-medical waste treatment facilities for treating or disposing biomedical waste shall be taxed with availability of ITC, like CETPs 12%
Hotel accommodation priced up to Rs.1,000 per day 12%
Training or coaching in recreational activities on arts or culture, or sports other than by individuals Applicable rate

5.    CBIC issued Important FAQs on GST applicability on ‘pre-packaged and labelled’ goods:

S. No. Question Clarification
1 What change has been made with respect to packaged and labelled commodity with effect from the 18th July, 2022?  

Prior to 18th of July, 2022, GST applied on specified goods when they were put up in a unit container and were bearing a registered brand name or were bearing brand name in respect of which an actionable claim or enforceable right in a court of law is available. With effect from the 18th July 2022, this provision undergoes a change and GST has been made applicable on supply of such “pre-packaged and labelled” commodities attracting the provisions of Legal Metrology Act, as detailed in subsequent questions. For example, items like pulses, cereals like rice, wheat, and flour (aata), etc., earlier attracted GST at the rate of 5% when branded and packed in unit container (as mentioned above). With effect from 18.7.2022, these items would attract GST when “prepackaged and labelled”. Additionally, certain other items such as Curd, Lassi, puffed rice etc. when “prepackaged and labelled” would attract GST at the rate of 5% with effect from the 18th July, 2022.

 

Essentially, this is a change in modalities of imposition of GST on branded specified goods to “pre-packaged and labelled” specified goods.

[Please refer to notification No. 6/2022-Central Tax (Rate) and corresponding notification under respective SGST Act, IGST Act]

2 What is the scope of ‘pre-packaged and labelled’ for the purpose of GST levy on food items like pulses, cereals, and flours?

 

For the purposes of GST, 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 Legal Metrology Act and the rules made thereunder.

 

Clause (l) of section 2 of the Legal Metrology Act reads as below:

(l) “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.

Thus, supply of such specified commodity having the following two attributes would attract GST:

(i) It is pre-packaged; and

(ii) It is required to bear the declarations under the provisions of the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder.

 

However, if such specified commodities are supplied in a package that do not require declaration(s)/compliance(s) under the Legal Metrology Act, 2009 (1 of 2010), and the rules made thereunder, the same would not be treated as pre-packaged and labelled for the purposes of GST levy

 

In the context of food items (such as pulses, cereals like rice, wheat, flour etc), the supply of specified pre-packaged food articles would fall within the purview of the definition of ‘pre-packaged commodity’ under the Legal Metrology Act, 2009, and the rules made thereunder, if such pre-packaged and labelled packages contained a quantity upto 25 kilogram [or 25 litre] in terms of rule 3(a) of Legal Metrology (Packaged Commodities) Rules, 2011, subject to other exclusions provided in the Act and the Rules made thereunder.

 

 

3 What is the scope of this coverage taking into account various exclusion(s) provided under the Legal Metrology Act and the rules made thereunder?

 

For such commodities (food items- pulses, cereals, flour, etc.), rule 3 (a) of Chapter-II of Legal Metrology (Packaged Commodities) Rules, 2011, prescribes that package of commodities containing quantity of more than 25 kg or 25 litre do not require a declaration to be made under rule 6 thereof. Accordingly, GST would apply on such specified goods where the pre-packaged commodity is supplied in

packages containing quantity of less than or equal to 25 kilogram.

 

Illustration: Supply of pre-packed atta meant for retail sale to ultimate consumer of 25 Kg shall be liable to GST. However, supply of such a 30 Kg pack thereof shall be exempt from levy of GST.

Thus, it is clarified that a single package of these items [cereals, pulses, flour etc.] containing a quantity of more than 25 Kg/25 litre would not fall in the category of pre-packaged and labelled commodity for the purposes of GST and would therefore not attract GST.

 

4 Whether GST would apply to a package that contains multiple retail packages. For example, a package containing 10 retail packs of flour of 10 Kg each?

 

Yes, if several packages intended for retail sale to ultimate consumer, say 10 packages of 10 Kg each, are sold in a larger pack, then GST would apply to such supply. Such package may be sold by a manufacturer through distributor. These individual packs of 10 Kg each are meant for eventual sale to retail consumer.

However, a package of say rice containing 50 Kg (in one individual package) would not be considered a pre-packaged and labelled commodity for the purposes of GST levy, even if rule 24 of Legal Metrology (Packaged Commodities) Rules, 2011, mandates certain declarations to be made on such wholesale package.

 

5 At what stage would GST apply on such supplies, i.e., whether GST would apply on specified goods sold by manufacturer/producer to wholesale dealer who subsequently sells it to a retailer?

 

GST would apply whenever a supply of such goods is made by any person, i.e. manufacturer supplying to distributor, or distributor/dealer supplying to retailer, or retailer supplying to individual consumer. Further, the manufacturer/wholesaler/retailer would be entitled to input tax credit on GST charged by his supplier in accordance with GST would apply whenever a supply of such goods is made by any person, i.e. manufacturer supplying to distributor, or distributor/dealer supplying to retailer, or retailer supplying to individual consumer. Further, the manufacturer/wholesaler/retailer would be entitled to input tax credit on GST charged by his supplier in accordance with

 

 

6 Whether tax is payable if such goods are purchased in packages of up to 25 kg/25liters by a retailer, but the retailer sells it in loose quantities in his shop for any reason?

 

GST applies when such goods are sold in pre-packaged and labelled packs. Therefore, GST would apply when prepackaged and labelled package is sold by a distributor/ manufacturer to such retailer. However, if for any reason, retailer supplies the item in loose quantity from such package, such supply by retailer is not a supply of packaged commodity for the purpose of GST levy.

 

7 Whether tax is payable if such packaged commodities are supplied for consumption by industrial consumers or institutional consumers?

 

Supply of packaged commodity for consumption by industrial consumer or institutional consumer is excluded from the purview of the Legal Metrology Act by virtue of rule 3 (c) of Chapter-II of Legal Metrology (Packaged Commodities) Rules, 2011. Therefore, if supplied in such manner as to attract exclusion provided under the said rule 3(c),it will not be considered as pre-packaged and labelled for the purposes of GST levy.

 

8 ‘X’ is a rice miller who sells packages containing 20 kg rice but not making the required declaration under legal metrology Act and the Rules made thereunder(although the said Act and the rules requires him/her to make a declaration), would it still be considered as pre-packaged and labelled and therefore be liable to GST?

 

Yes, such packages would be considered as pre-packaged and labelled commodity for the purposes of GST as it requires making a declaration under the Legal Metrology (Packaged Commodities) Rules, 2011 (rule 6 thereof). Hence, miller ‘X’ would be required to pay GST on supply of such package(s).
 
9 Any other relevant issue?

 

The Legal Metrology Act and the rules made thereunder prescribe criterion(s) for exclusion (as stated above) and provides certain exemptions under rule 26 of Legal Metrology (Packaged Commodities) Rules, 2011. It is reiterated therefore that, if supplied in such manner as to attract exclusion, or such exemption, the item shall not be treated as pre-packaged commodities for the purposes of GST levy.

 

 

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

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