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.
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:
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: -
These are the new provisions which came into effect post-notification dated 13th of July 2022.
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:-
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.
Goods and Services Tax which is levied by the central government is known as CGST. It means Central Government Services Tax.
This is an act established by the central government to establish and enforce the standards of weights and measurements.
There are many goods and items that come under the specific label of pre-packaged and pre-labelled goods. Some of them are wheat, rice, flour, curd etc.