Karnataka AAR Mentions 5% GST Rate on Jaggery Packed & Labelled

A 5% GST on pre-packaged and labelled jaggery is to be levied, Karnataka Authority of Advance Ruling (AAR) mentioned.

The two-judge bench of M.P. Ravi Prasad and Kiran Reddy T. uncovered, all sorts of jaggery, pre-packaged and labelled, are covered by S. No. 91A of GST Notification No. 1/2017 Central Tax (Rate) dated June 28, 2017.

The petitioner would be a partnership firm involved in the jaggery sale.

The petitioner mentioned that jaggery would get exempted from the GST under SI No. 94 of Notification No. 2/2017-Central Tax (Rate), on June 28, 2017. as per Notification No. 6/2022-Central Tax (Rate) dated July 13, 2022, they specified that all kinds of jaggery along with cane jaggery (gur), palmyra jaggery, pre-packaged and labelled, and Khandsari sugar, pre-packaged and labelled, has been inserted into Schedule 1-2.5% at Sl. No.91 A under the GST Rate & HSN codes 1701 and 1702.

According to the applicant, they sell jaggery, which comes in wrapped, loose gunny sheets that are stitched together and come in three different weights – 5 kg, 10 kg, and 30 kg. The farmer makes jaggery mainly from sugar cane juice, adding the required ingredients in trace amounts. The sugarcane juice is first heated in a large pot, then transferred to 5 kg, 10 kg, and 30 kg pots to cool.

After the chilling process is complete, the sugarcane juice will be in the shape of lumps (jaggery) weighing either 5 kg, 10 kg, or 30 kg. None of the lumps’ weights is comparable. Even if the sizes are the same, it might weigh a few grams more or less, meaning that the weight is not consistent.

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The Authority decided that article 91A’s statement that all varieties of jaggery, including cane jaggery (gur), palm jaggery, pre-packaged and labelled, and Khandsari sugar, pre-packaged and labelled, are subject to CGST at a rate of 2.5%. This indicates that the CGST rate of 2.5% is applicable to all varieties of jaggery that are packed and labelled.