E Invoice for supply of Rice, Goods and Services Tax - GST

[Ravikumar Doddi]

Sirs,

E invoice is to be issued or not for supply of Rice(HSN 1006) more than 25 kg single pack (Prepackaged and Labelled).

As per Ministry of Finance FAQ No. F. No. 190354/172/2022-TRU dated 17-7-2022 dated GST is not applicable when the goods(cereals,pulses,flour) are packed and Labelled as per Legal Metrology Act of more than 25Kg or so. When there is no tax do we need to issue E-invoice. Please advise.

Posts / Replies

[Padmanathan Kollengode]

There are few legal issued involved here. Keeping that aside, if there is no tax charged on the invoice i.e. bill of supply is issued, e-invoicing is not required to be issued.

If the querist is interested in legal aspects involving the F. No. 190354/172/2022-TRU dated 17-7-2022, I would be glad to share my views.

[Ravikumar Doddi]

Thank you Padmanathan sir.

Yes sir, I am interested to know the Legal aspects in F. No. 190354/172/2022-TRU dated 17-7-2022.

[Padmanathan Kollengode]

Pls check your Direct Message.

[Ravikumar Doddi]

Thank you sir

[Amit Agrawal]

@ Shri Padmanathan Ji,

Please share your take on subject FAO here, so that readers of TMI can take benefit on your insights.

[Amit Agrawal]

"subject FAQ

[Padmanathan Kollengode]

Sir,

Notification No 01/2017 CT-R dated 28-06-2017 as amended by Notification No. 6/2022-Central Tax (Rate) dated 13-07-2022 w.e.f. 18-07-2022 reads as under:

Schedule I – 2.5%

51.

1006

Rice, pre-packaged and labelled

Clause (ii) of Explanation to Notification - 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 (1 of 2010) 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, 2009 (1 of 2010) and the rules made thereunder.

Section 2(l) of LM Act, 2009 states: (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;

So any pre-determined quantity ( whether 25 Kgs or more) placed in a package without presence of the purchaser is "pre-packed commodity" as per LM Act, 2009 irrespective of whether it is 25 Kgs or not.

So when a declaration is required to be made in package or label affixed to such pre-packed commodity as per the requirement of LM Act, it becomes taxable under GST Notification. But, the FAQ No. F. No. 190354/172/2022-TRU dated 17-7-2022 goes on to state that:

"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."

Thus, the FAQ itself accepts that declarations are required for wholesale package but for reasons best known to CBIC, it goes on to say that it will not be a "pre-packaged and labelled commodity" for GST levy.

The Department may in future take a view that it may be taxable as it falls within the ambit of Notification although the FAQ states otherwise:

Also, in my humble view, the binding nature of FAQ itself is questionable as regard to the taxability although one cannot be alleged with any suppression/ misstatement for following the FAQ.

[Amit Agrawal]

Thanks for sharing your views and note on subject FAQ, Shri Padmanathan Ji!

[Padmanathan Kollengode]

Sir,

I Raised this point only because the querist had mentioned they are supplying rice more than 25Kg which is pre-packed and labelled. But It is not clear whether it is wholesale package liable for declaration under rule 24 or not.

Therefore, just highlighted this issue.

[Amit Agrawal]

As per Legal Metrology (Packaged Commodities) Rules, 2011, “wholesale package” means a package containing- (i) a number of retail packages, where such first mentioned package is intended for sale, distribution or delivery to an intermediary and is not intended for sale direct to a single consumer; or (ii) a commodity sold to an intermediary in bulk to enable such intermediary to sell, distribute or deliver such commodity to the consumer in smaller quantities; or, (iii) packages containing ten or more than ten retail packages provided that the retail packages are labeled as required under the rules

Said FAQ talks about ''a package of say rice containing 50 Kg (in one individual package)'.

One needs more study & research of various provisions related to 'metrology' as well as better understanding of factual aspects before commenting on your post at serial no. 7 above.

[Ravikumar Doddi]

Shri Padmanathan ji,

It is a wholesale and required declaration as per LM ACT

[Ravikumar Doddi]

sorry sir,

FAQ says more than 25 kg no declaration is required, this pack also more than 25kg only

[Ritu Banerjee]

as per the Ministry of Finance FAQ No. F. No. 190354/172/2022-TRU dated 17-7-2022, when goods such as cereals, pulses, and flour are packed and labeled in accordance with the Legal Metrology Act, and exceed 25 kg, GST is not applicable. In such cases where there is no tax liability, it may not be mandatory to issue an e-invoice for these specific transactions.

However, please note that the requirement for issuing e-invoices may also depend on other factors and regulations apart from GST. It is recommended to consult with the relevant tax authorities or seek professional advice to ensure compliance with all applicable regulations and guidelines regarding e-invoicing for your specific business circumstances.

We encourage you to engage with a tax expert or reach out to the appropriate authorities who can provide accurate and up-to-date information regarding the issuance of e-invoices for your particular situation, considering all relevant aspects of the transaction and the prevailing legal requirements.