GST on pre-packaged labelled rice applies even for export-linked supplies if notification conditions are met.

GST applies to pre-packaged and labelled rice up to 25 kg because such goods fall within the taxable entry under the rate notification when read with the Legal Metrology framework. Supplies made directly to a foreign buyer, on a bill-to-ship-to basis to an exporter, or to an exporter's factory for onward export remain taxable on the facts stated, and export movement does not by itself remove the levy. The concessional treatment for merchant exporter supplies is available only if the prescribed notification conditions are satisfied, so the applicable rate remains 5% or IGST, as relevant, from 18 July 2022.

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Issues: Whether GST is leviable on supply of pre-packaged and labelled rice up to 25 kg when supplied directly to a foreign buyer, supplied to an exporter on a bill to ship to basis, or supplied to the factory of an exporter for onward export.

Analysis: The applicable GST rate under Notification No. 1/2017-Central Tax (Rate) turned on whether the goods were covered by the entry for rice that is pre-packaged and labelled. The expression was read in light of the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011, under which packages of rice up to 25 kg require declarations and therefore answer the description of pre-packaged and labelled commodities for GST purposes. The ruling also noted that export does not take the goods outside the levy where the supply itself is of taxable pre-packaged and labelled goods, and that the special concessional rate for supplies to merchant exporters applies only subject to the prescribed conditions.

Conclusion: GST is leviable on all three categories of supply of pre-packaged and labelled rice up to 25 kg, at the applicable rate of 5% or IGST as the case may be, from 18 July 2022, subject to the relevant notification conditions.

Final Conclusion: The classification of the goods as pre-packaged and labelled rice brought the supplies within the taxable entry, and export-linked movement did not exempt the supplies from GST on the facts presented.

Ratio Decidendi: Where goods fall within a taxable entry as pre-packaged and labelled commodities under the GST rate notification, export destination does not by itself exclude GST liability; the applicable concessional or export-related rate depends on the specific notification conditions being satisfied.

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