Reply to GST

 

Abhra Ghosh,

Deputy Commissioner of Revenue,

Lyons Range & N.D. Sarani Charge

1st Building, 5th Floor, Room No.- 505,

14-Beliaghata Road, Kolkata- 700015

033 7122 1382

9433112702

 

Ref.: Your E-mail On Wednesday, December 4, 2024, 2:45 PM, Abhra Ghosh <abhra.ghosh@wbcomtax.gov.in>

 

Regarding :

 

GSTIN	19AAECD1530D1Z5
Trade Name	D.C.N. MARINE PRODUCTS PRIVATE LIMITED
Legal Name	D.C.N. MARINE PRODUCTS PRIVATE LIMITED
Tax Period	2024-2025 (up to September 2024)

 

Respected Madam,

 

Please note that on 20/11/2024, a team of officers from Lyons Range & N. D. Sarani Charge visited the godown at the above mentioned address and met with Director Sri APURBA NASKAR. In presence of Sri Naskar the team of officers found and noted stock of rice in sealed bags kept in two rooms. Names like ‘Kamini Dudheswar’, ‘Bhoomi Bhog Miniket’, Apple Sortex Miniket’ etc. were written on those bags of rice found in the godown, are all of 26 Kg., quantities and other particulars has been taken note by the team of officers, which are exempted under GST.

 

Though you advised to pay tax @ 2.5 % each under CGST and SGST on turnover of Rs. 18,76,86,028/- along with the other dues by 12/12/2024 failing which proceedings shall be initiated in accordance with the provisions of law, by your E-mail On Wednesday, December 4, 2024, 2:45 PM, Abhra Ghosh <abhra.ghosh@wbcomtax.gov.in>

 

However, At the outset, we would like to make it clear that the Central Goods and Services Tax  Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017  (the WBGST Act, for short) have the same provisions in like matter except for certain  provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression “GST Act‟ would mean the CGST Act and the WBGST Act both.

 

We are very candidly submitted that we were engaged in purchase and sale of pre-packaged and labelled bags of rice of 26 Kg. and above, and we did not have any infrastructure of packaging the rice or any other commodity at any place.

 

The HSN Code applicable to Rice is 1006 which is covered under Chapter 10 and chargeable to Tax @ 5%. Prior to 18th of July, 2022, GST applied on specified goods  when they were put up in a unit container and were bearing a registered brand name or were  bearing brand name in respect of which an actionable claim or enforceable right in a court of  law is available. With effect from the 18th July 2022, this provision undergoes a change and GST has been made applicable on supply of such "pre-packaged and labelled" commodities attracting the provisions of Legal Metrology Act.. For example, items like pulses, cereals like rice, wheat, and flour (Atta), etc., earlier attracted GST at the rate of 5% when branded and packed in unit container (as mentioned above). With effect from 18.7.2022, these items would attract GST when “pre-packaged and labelled”.  

 

 

For the purposes of GST, the expression “pre-packaged and labelled‟ means a „pre packaged commodity‟ as defined in clause (I) of section 2 of the Legal Metrology Act, 2009, 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 and the rules made thereunder. 

 

Clause (I) of section 2 of the Legal Metrology Act reads as below:  

 

(I) “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.  

 

Thus, supply of such specified commodity having the following two attributes would  attract GST:  

(i) It is pre-packaged; and 

(ii) It is required to bear the declarations under the provisions of the Legal Metrology  Act, 2009 (1 of 2010) and the rules made thereunder.  

 

If such specified commodities are supplied in a package that do not require declaration(s)/compliance(s) under the Legal Metrology Act, 2009 (1 of 2010), and the rules  made thereunder, the same would not be treated as pre-packaged and labelled for the  purposes of GST levy. 

 

The Heading 1006 of the Customs Tariff covers “RICE‟. Further, note 1(b) of Chapter 10 speaks that this Chapter does not cover grains which have been hulled or otherwise worked.  However, rice, husked, milled, polished, glazed, parboiled or broken remains classified in heading 1006. For the sake of convenience, products under tariff item 1006 are reproduced below: 

1006               RICE 

1006 10                   Rice in the husk (paddy or rough):  

1006 10 10     Of seed quality  

1006 10 90     Other 

1006 20 00     Husked (brown) rice  

1006 30          Semi-milled or wholly-milled rice, whether or not polished or glazed :  1006 30 10 Rice, parboiled  

1006 30 20     Basmati Rice 

1006 30 90     Other 

1006 40 00     Broken rice 

 

Going by the notes under Chapter 10, we thus find that the product “rice‟ is classifiable under Chapter Heading 1006. Therefore, the rate of tax on supply of “ rice‟ would be same in terms of Notification No. 06/2022- Central Tax  (Rate) dated 13.07.2022, „Rice, pre-packaged and labelled‟ attract tax @ 5% with effect from  18.07.2022. On the other hand, Notification No. 07/2022-Central Tax (Rate) dated  13.07.2022 exempts supply of „Rice, other than pre-packaged and labelled‟ with effect from  18.07.2022. In a Press Release posted on 18.07.2022 on the subject matter „FAQ on GST  applicability on „pre-packaged and labeled goods‟, it has been clarified that “In the context of  food items (such as pulses, cereals like rice, wheat, flour etc), the supply of specified pre packaged food articles would fall within the purview of the definition of 'pre-packaged  commodity' under the Legal Metrology Act, 2009, and the rules made there under, if such  pre-packaged and labelled packages contained a quantity up to 25 kilogram [or 25 litre] in  terms of rule 3(a) of Legal Metrology (Packaged Commodities) Rules, 2011, subject to other  exclusions provided in the Act and the Rules made there under.” In the said Press Release, it has further been clarified that “Supply of packaged commodity for consumption by industrial consumer or institutional consumer is excluded from the purview of the Legal Metrology Act  by virtue of rule 3 (c) of Chapter-II of Legal Metrology (Packaged Commodities) Rules, 2011.  Therefore, if supplied in such manner as to attract exclusion provided under the said rule  3(c), it will not be considered as pre-packaged and labelled for the purposes of GST levy.‟  

 

We therefore not liable to pay tax @ 5% on supply of “rice‟ as “pre-packaged and labeled” contained a quantity of 26 kilogram and above which do not require declaration(s)/compliance(s) under the Legal Metrology Act, 2009 (1 of 2010), and the rules  made thereunder, the same would not be treated as pre-packaged and labelled for the  purposes of GST levy. And such supply is exempted from payment of tax.  

 

This is for your kind references and perusal thereof.

 

Thanking you,

 

Yours’ faithfully,

 

 

ARPITA NASKAR

Director

DCN Marine Products Private Limited

 

Dated : 11^th day of December’ 2024