AP AAR Applies GST on export of pre-packaged and labelled rice bags up to 25KG

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AP AAR Applies GST on export of pre-packaged and labelled rice bags up to 25KG

GST shall be assessed on the export of pre-packaged and labelled rice up to 25 kg to foreign buyers, Andhra Pradesh Authority of Advance Ruling (AAR) held.

The bench of K. Ravi Sankar and B. Lakshmi Narayana noted that the ultimate buyer is away and the commodity is being pre-packed for an unknown ultimate buyer. The buyer from the petitioner is reselling that to another buyer, be it export or indigenous. The bench approved the observation concerning the applicability of GST on “prepackaged and labelled,” irrespective of whether it is for domestic sale or exported outside the country.

M/s. Sarala Foods Private Limited, engaged in the manufacturing and supply of rice, sought an advance ruling on the GST applicability on the export of pre-packaged and labelled rice up to 25Kgs. The application was made under Section 97 of the CGST and APGST Acts, with the company seeking clarity on three distinct types of supply transactions to foreign buyers, exporters for re-export, and direct supply to the exporters’ factories

Rulings

The AAR was approached with three questions concerning the GST applicability on:

  • Export of pre-packaged and labelled rice up to 25Kgs to a foreign buyer.
  • Supply of such rice to an exporter on a “bill to ship to” basis for subsequent export.
  • Supply of such rice to an exporter’s factory for eventual export.

For all three scenarios, the AAR affirmed that GST would be applicable, marking a significant clarification on the taxability of such transactions under the GST regime.

The copy of the order is as under:

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