GST @5% is leviable on all types of jaggery, pre-packaged and labelled

Last updated: 10 February 2023

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Quick Summary

The Karnataka Authority for Advance Rulings (AAR) has ruled that all types of jaggery, when pre-packaged and labelled, are subject to a 5% Goods and Services Tax (GST). This decision clarifies that such jaggery falls under Sl. No. 91A of the Central Tax (Rate) Notification. The ruling was made in response to an application by M/s Prakash and Company, who argued that their jaggery, sold wrapped in loose gunny sheets, should be exempt from GST.

Court :
AAR, Karnataka

Brief :
The AAR, Karnataka in the matter of M/S Prakash and Company [Advance Ruling No. KAR ADRG 06/2023 dated January 23, 2023] ruled that all types of jaggery pre-packed and labelled are exigible to Goods and Services Tax ("GST") at 5% as per SI. No. 91A of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017 ("the Goods Rate Notification").

Citation :
Advance Ruling No. KAR ADRG 06/2023 dated January 23, 2023

The AAR, Karnataka in the matter of M/S Prakash and Company [Advance Ruling No. KAR ADRG 06/2023 dated January 23, 2023]ruled that all types of jaggery pre-packed and labelled are exigible to Goods and Services Tax ("GST") at 5% as per SI. No. 91A of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017 ("the Goods Rate Notification").

Facts

M/s Prakash and Company ("the Applicant") is a partnership firm being a selling agent of jaggery. The Applicant submitted that jaggery is sold in wrapped loose gunny sheets stitched with thread and weighing in 3 different sizes and that the jaggery lumps are not packed in any content, but are either wrapped in jute cloth or plastic paper. The Applicant further submitted that jaggery is exempted from GST as per Sl. No. 94 of the Notification No.2/2017-Central Tax (Rate), dated June 28, 2017("Goods Exemption Notification").

Issue

Whether the supply of jaggery in wrapped loose gunny sheets stitched with thread would be covered under Sl. No. 94 of the Goods Exemption Notification and exempt from GST?

Held

The AAR, Karnataka in Advance Ruling No. KAR ADRG 06/2023 has held as under:

Stated that, all types of jaggery, pre-packaged and labelled are covered under Sl. No. 91A of the Goods Rate Notification.
Held that, all types of jaggery, pre-packaged and labelled are exigible to GST at 5%.

Relevant Provisions

SI.No.91A of the Goods Rate Notification

"Schedule I - 2.5%

"Sl. No.	Chapter / Heading / Sub-heading / Tariff item	Description of Goods
91A	1701 or 1702	Jaggery of all types including Cane Jaggery (gur), Palmyra Jaggery, pre-packaged and labelled; Khandsari Sugar, pre-packaged and labelled"

FAQ :

All types of jaggery, when pre-packaged and labelled, are subject to a GST rate of 5%.

No, the 5% GST rate specifically applies to jaggery that is pre-packaged and labelled. Loose jaggery may have different tax implications.

The GST rate of 5% for pre-packaged and labelled jaggery is specified under Sl. No. 91A of Notification No. 1/2017-Central Tax (Rate).

The ruling was made by the Authority for Advance Rulings (AAR), Karnataka, in the matter of M/s Prakash and Company.

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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