Applicability of GST on pre-packaged and labelled shrimps: such packaging attracts 5% GST even when exported under Legal Metrology rules.

Pre-packaged and labelled frozen shrimps packed in printed inner pouches or boxes that specify predetermined quantities fall within the Legal Metrology Act definition of "pre-packaged and labelled" goods; consequently Notification No. 06/2022 extends GST to such specified commodities and they are taxable even when exported. The ruling treats inner packaging of 340 g to 5 kg (and specified pre-packed consignments up to 25 kg) as liable to GST, concluding that processed frozen shrimps (HSN 0306) packaged accordingly attract GST at 5% for both domestic supply and export.

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Issues: Whether the export of processed and frozen shrimps (HSN 0306), packed in individual laminated and printed pouches/boxes containing design, label and other particulars (pre-packaged and labelled), attracts GST at 5%.

Analysis: The Authority examined the definition of "pre-packaged and labelled" as set out in the Explanation to the relevant Notifications (which adopts clause (l) of section 2 of the Legal Metrology Act, 2009) and the Legal Metrology Act, 2009 definition of "pre-packaged commodity" (Section 2(l)). The Authority noted that export is treated as inter State supply and that exports are classified as zero rated under the IGST Act but that the rate notifications and explanations determine applicability of the specified GST rate on supplies of certain pre packaged and labelled commodities. The factual finding was that the applicant's product is packed in inner retail packages (weighing between 340 grams and 5 kilograms) which are printed/labelled and have predetermined quantities and therefore satisfy the characteristics of a "pre-packaged and labelled" commodity under the Legal Metrology Act and the notification explanations. The Authority also relied on the CBIC FAQs and the substitution effected by Notification No. 06/2022 (C.T. Rate) dated 13.07.2022 which brought pre packaged and labelled specified commodities within the scope of GST at the notified rate. On these statutory and factual bases, the Authority concluded that such pre packaged and labelled packages (upto 25 kg) are taxable under the rate notification and liable to GST at 5%, irrespective of whether supplied domestically or exported.

Conclusion: The export of processed and frozen shrimps (HSN 0306) packed in individual laminated and printed pouches/boxes that qualify as "pre-packaged and labelled" attracts GST at 5% (ruling affirmative in favour of Revenue).

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