GST ruling: Packaging of frozen meat by AOV Agro Food Pvt. Ltd. not considered 'unit containers'

The Authority for Advance Rulings determined that the packaging method of M/s. AOV Agro Food Pvt. Ltd. does not qualify as "unit containers" under GST law. The frozen meat products supplied to the Army, packed in LDPE and HDPE bags with varying weights, were found not to meet the criteria for unit containers. As a result, the products were exempt from GST under specific notifications.

---

---

Issues Involved:
1. Classification of the product under HSN codes 0204 and 0207.
2. Determination of whether the packaging qualifies as a "unit container" under GST law.
3. Applicability of GST rates and exemptions on the product based on the packaging.

Issue-wise Detailed Analysis:

1. Classification of the product under HSN codes 0204 and 0207:
The applicant, M/s. AOV Agro Food Pvt. Ltd., is engaged in the slaughtering and processing of poultry, sheep, and goat meat, supplying these products to both domestic and export markets, including the Army. The products in question are classified under HSN code 0204 for meat of sheep/goat and HSN code 0207 for meat and edible offal of poultry.

2. Determination of whether the packaging qualifies as a "unit container" under GST law:
The primary issue is whether the applicant's packaging methods qualify as "unit containers," which would affect the GST rate applicable to their products. The applicant argues that their products are not packed in unit containers as defined by the GST law, which describes a unit container as a package designed to hold a pre-determined quantity or number, indicated on the package. The applicant’s method involves placing frozen carcasses and whole chickens in LDPE bags (primary packing) without sealing or indicating weight, and then placing these LDPE bags in HDPE bags (secondary packing) with manually marked weights.

The Deputy Excise & Taxation Commissioner (ST) contends that the applicant's goods, packed in bags, qualify as being in unit containers, thus attracting GST.

3. Applicability of GST rates and exemptions on the product based on the packaging:
From 1st July 2017 to 14th November 2017, products under chapter headings 0204 and 0207, if frozen and put in unit containers, were taxable at 12% GST. From 15th November 2017 onwards, the same products, if frozen, put in unit containers, and bearing a registered brand name or a brand name with an actionable claim, were taxable at 5% GST.

The applicant's position is that their packaging does not meet the definition of "unit containers," and therefore, their products should not be subject to GST. They cite case laws, including CCE vs. Shalimar Super Foods and Surya Agro Oils Ltd. vs. CCE, Indore, to support their argument that their packaging does not constitute unit containers as it does not hold a pre-determined quantity.

Discussion and Findings:
The Authority for Advance Rulings examined the definitions and case laws cited. They concluded that the applicant's packaging does not qualify as unit containers because the packages do not hold a pre-determined quantity or number. The packaging is not standardized and varies in weight.

Advance Ruling:
(a) The whole sheep/goat carcass in frozen state, packed in LDPE bags without a specified weight, and further packed in HDPE bags with varying actual weights, supplied to the Army, does not qualify as a product put up in "unit containers."
(b) The whole chicken in frozen state, packed in LDPE bags and then in HDPE bags with varying actual weights, supplied to the Army, does not qualify as a product put up in "unit containers."
(c) These products fall under the exemption list as per entry no. 10 and 13 of notification No. 2/2017-Integrated Tax (Rate) dated 28th June 2017 up to 14th November 2017, and thereafter as per entry No. 9 of Notification No. 44/2017-Integrated Tax (Rate) dated 14th November 2017.

Ordered accordingly.

---