9911796707
TMI Blog2024 (9) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 3. Brief Facts of the case: i). M/s Asvini Fisheries Private Limited (the Applicant/the Company), has been engaged in the business of exporting processed shrimps for over three decades. The Applicant sources shrimps locally from farmers, which undergo further processing in the factory such as receiving, washing, de-veining, peeling, de-heading, tail removal, sorting, grading and freezing. ii). Processing steps performed by the applicant is entirely dependent on the customer's requirements/ order. Based on the customer requirement, one or more processing steps can be performed independently to produce the desired results. iii). As part of the freezing process, the Applicant, uses two different types of freezing methodology to freeze the processed shrimps. a) Individual quick freezing (IQF) b) Block freezing iv). Processed raw material is thereby packed immediately as per the buyer's instructions. The Applicant uses the following types of packaging: a) Primary packaging or inner packing i.e., packaging of inner boxes or pouches b) Secondary packaging or outer packing i.e., packaging o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heading 0306 and discharging tax as per S.No.4 of schedule 1 of notification 01/2017-central tax (rate) dated 28th June 2017 up to 12/07/2022. S.No Chapter/ Heading/ Sub-heading / Tariff item Description of Goods 4 0306 Crustaceans whether in shell or not, frozen, dried, salted or in brine; crustaceans, in shell, cooked by steaming or by boiling in water, frozen, dried, salted or in brine; flours, meals and pellets of crustaceans, fit for human consumption. iii). Further the appellant would like to inform that Entry No. 4 of Schedule | of the Notification No. 1/2017-Central Tax (Rate) was amended by Notification No. 06/2022-Central Tax (Rate) dated 13-07-2022 whereby GST at the rate of 5% was made applicable to supply of "pre-packaged and labelled" Crustaceans (i.e., shrimps). iv). Further as per explanation (ii) of Notification No. 06/2022-Central Tax (Rate), the expression "pre-packaged and labelled" means a pre-packaged commodity as defined under section 2 of the Legal Metrology Act, 2009 where the package in which the commodity is pre-packed or a label is securely affixed there to is required to bear the declaration under the provisions of the said Act and the rules ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be applicable on specified goods (namely shrimps) where the pre-packaged commodity is supplied in packages containing a quantity of less than or equal to 25 kgs. ii) Pre-packaged and labelled commodities processed exclusively for exports have not been excluded from the Legal Metrology Act, 2009 and rules made there under. iii) Therefore, we understand that GST would be applicable on the supply of processed frozen shrimps in packages of up to 25 kgs, irrespective of the fact that the said supply is for domestic sale or for exports. Advance Ruling sought on Whether GST is applicable on the export of Crustaceans (shrimps) which are packed and labelled as per the customer requirements. 7. Personal Hearing: The proceedings of Personal Hearing was conducted on 02.05.2024, for which the authorized representative, Sri, Arihanth Kumar Jain G, CA, Chennai has appeared and reiterated the facts narrated in their application. 8. Discussion and Findings: i) We have carefully gone through the submissions made by the applicant in the advance ruling application, the additional submissions made during the personal hearing and judgements made by the Hon'ble Courts in the same issue . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of sub-Section (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person." Accordingly, it may be noted that all exports are to be deemed as inter-state supplies', and as per Section 16 of the IGST Act, 2017, export of goods or services or both are to be treated as Zero Rated Supplies'. It may be noted here that the exporter has the option either to export under Bond/Letter of Undertaking without payment of tax and claim refund of unutilised input tax credit or pay IGST at the time of export and claim refund of the same, as the case may be. vi) The point for determination herein is as to whether the export of specified pre-packaged and labelled frozen Shrimp meant for export would fall within the meaning of the definition of 'pre-pack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for retail sale, irrespective of the fact whether the outer packaging is printed or not. Under these circumstances, the inner packaging which ranges from 250 grams to 2 kilograms becomes liable to GST, as the same fall within the ambit of 'pre-packaged and labelled' category which is mandated to bear the declarations. The above fact regarding the levy of GST as "pre-packaged and labelled" gets validated through the FAQs dated 18.07.2022 issued by the CBIC which has a persuasive value while interpretation the legal provisions. Under the said "FAQs on GST applicability on 'pre-packaged and labelled' goods", the relevant clarification under SI.No.4, goes as below:- S.No Question Clarification 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logy Act w.e.f 18.07.2022". In this regard a) notification no 6/2022 dated 13.07.2022, or b) the Legal Metrology Act 2009 has not made any differentiation with regard to applicability of GST on exports of goods/ mentioning of declarations or pre packed commodities for export. In the instant case, the authorities observation after going through the content of the matter is that the supply of shrimps in pouches or boxes of upto 25kg, which duly pre-packaged and labelled as per Legal Metrology Act 2009 and the rule made there under is a taxable event and it is not an exempted / nil rated supply. Besides Ministry of finance Govt of india clarified the applicability of GST on pre packaged and labelled goods through FAQs, which were uploaded online on 18. 07.2022 w.r.t. the notification no 6/2022 (CGST RATE). And also, in this case, the ultimate buyer is not present when commodity is placed in package and the commodity is being pre-packed for an unknown ultimate buyer, who may be indigenous or outside the country. Therefore, where the quantity involved is 25Kgs or less in respect of specified commodities including shrimps (HSN 0306, as per S.No.4 of schedule 1 of notification 01/2017-c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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