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GST on Pre-Packaged & Labelled Goods

Seep Gupta
Seep Gupta at December 16, 2022

GST on Pre-Packaged & Labelled Goods

Recently in the 47th GST council meeting, the meeting came up with a recommendation to reconsider the exemption of GST from pre-packaged and pre-labelled products. Earlier, it was recommended that GST on packaged goods will be exempted.

What are Pre-Packaged and Labelled Goods?

Section 2(I) of the Legal Metrology Act defines ‘Pre-Packaged’ and ‘Pre-labelled’ goods. It means a commodity which is placed in a package (whether sealed or not) so that such product contained therein has a pre-determined quantity.

To summarise or in brief, we can say that pre-packaged and pre-labelled goods will be taxable from the 18th of July 2022. However, it is important to note that this provision needs to satisfy two crucial prerequisites. These are given below: 

  • It is a ‘pre-packaged’ product or commodity.
  • Such pre-packaged or pre-labelled commodity is required to meet the provisions which are given under Legal Metrology Act, 2009.

Applicability of GST on Pre-Packaged and Labelled Goods

Applicability of GST Prior to the 18th of July 2022

Till 17th of July 2022 provisions related to GST exemption were given in notification of CGST (Central Goods and Services Tax) dated 28th of June. According to this some products were exempted from attracting GST. These products mainly include Pre-packaged or Pre-labelled goods when sold under an unregistered brand name.

Applicability of GST with Effect from the 18th of July 2022

From the 18th of July 2022 pre-packaged and labelled GST started getting levied. The CGST (Central Goods and Service Tax) notification dated 13th of July 2022 came into force on the 18th of July 2022. Now, GST will be applied in the given below manner: -

  • Specified goods such as pre-labelled and pre-packaged goods will now attract GST (Goods and Services Tax) and
  • Goods or products which do not come under the label of pre-packaged or pre-labelled goods are exempted from GST provisions.

These are the new provisions which came into effect post-notification dated 13th of July 2022.

 

Applicability of Legal Metrology Act on Pre-Packaged and Labelled Goods

Specified pre-packaged or pre-labelled goods or items that come under the provisions mentioned in the Legal Metrology Act are taxable under the GST with effect from the 18th of July 2022.

And the packaged goods or items which do not come under the provisions of the Legal Metrology Act are exempted under the GST. GST on such packaged foods will not be levied.

Following categories of pre-labelled and pre-packaged goods that do not come under the intended provisions of the Legal Metrology Act. These are given below:-

  • Packaged Commodity having a quantity of more than 25kg/25 litres.
  • Packaged commodity meant for institutional consumers/industrial consumers.
  • Fertilizers and cement are sold via bags up to 50 kgs.

Generally, rules and regulations mentioned under the Legal Metrology Act are not applicable to wholesale packages, hence they are exempted from the provisions mentioned under the Goods and Services Tax Act.

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