GST impact on sale of dried red Chilli procured directly from farmers and sold to wholesalers

[Raam Srinivasan Swaminathan Kalpathi]

A person buys dried red chilli (HSN 09042110) directly from farmers and sells it to wholesalers charging GST of 5%. Is this rate correct?

Secondly, if suppose this person without any branding (not falling under the metrology act) sells the produce (procured from farmers) to wholesalers in gunny bags - would this attract the 5% GST?

Thanks

AI Summary

GST on dried red chilli turns on agricultural produce status and whether supplies are pre-packaged and labelled.
Dry red chilli procured from farmers and supplied to wholesalers is discussed with reference to GST classification, the agricultural produce exemption, and the 5% rate applicable to dried chillies under the GST rate schedule. Dried chillies are treated as agricultural produce where drying only makes the crop marketable without altering its essential character, while processed, powdered, branded, or pre-packaged and labelled supplies are treated differently. Selling in gunny bags alone does not determine taxability; the relevant test is whether the goods are pre-packaged and labelled under the legal metrology framework.