Dealer in rice, if re-packed in small qty, mvat?

Friends, we are resaler in normal rice i.e. Tax Free Commodity in Maharashtra, purchased from Rice Mills.

Now, we want to start selling Basmati Rice. Suppose, I purchase the Goods from Mill in Bulk i.e. to say in 50 Kgs packing and re-pack in small qty like 5 kgs.under our brand name.

What will be implications regarding treatment of such sales in MVAT?

Whether it will be treated as Manufacturing or not?

Whether MVAT will be levieable on these sales or not?

Kindly reply.

T & R

KP

Replies (1)
Your case is similar to the case of landmark decision given by supreme court in case of : Empire Industries. Repacking of bulk rice would be deemed manufacturing and hence excise duty would be applicable. MVAT would not be applicable since the ultimate goods I.e rice is tax free under MVAT act, 2002

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