GST AAR: Tax-free Supply of 1kg Red Dal to Civil Corporations

There is no Goods and Service Tax (GST) levy on the 1kg supply of red gram Dal and packing it into 50 kg bags to civil supplies corporations, Andhra Pradesh Authority for Advance Ruling (AAR) ruled.

The petitioner Seetharamanjaneya Dal and fried gram Mill was been involved in the business pulses and dals. The petitioner would have the facility in his mill to transform the pulses into dals.

The applicant was a successful bidder and supplied the red-gram dal to the corporation in accordance with the guidelines issued by the corporation regarding packing and printing of the label. The Andhra Pradesh State Civil Supplies Corporation Limited had invited tenders for the supply of red gram dal, in 1 kg packet form with secondary packaging in 50 kg PP bags.

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The applicant has requested an advance ruling on whether the delivery of 1kg packaging red gram dal secondary packing in a 50 kg bag to the AP State Civil Supplies Company Ltd, Vijayawada according to the design and label have given by the corporation with a prior agreement charges GST.

The initial pre-requisite of the taxability was that the commodity must secure a pre-packaged commodity that directed that the commodity was not get packed for any particular said buyer, The Authority Bench of K. Ravi Sankar, (Commissioner of State Tax Member) and RV Pradhamesh Bhanu, (Joint Commissioner of Central Tax) followed. For example, the petitioner was packing the commodity on order and on the particular directions of the buyer, AP State Civil Supplies Corporation Limited.

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“It was clearly evident from the package that the AP State civil had made very clear instructions as to the colour, theme, transparency and the details to be printed on the package. Thus, the commodity is packed for retail sale for any buyer who may purchase at a later point, but it is packaged for a specific buyer. Thus, the first and foremost condition of taxability is not satisfied, hence there is no question of the taxability of the commodity in the instant case. In view of this the discussion as primary/secondary packaging or Institutional supply is nothing but infructuous,” the Bench further observed.