TaxTMI 
TaxTMI 
GST impact on sale of dried red Chilli procured directly from farmers and sold to wholesalers
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....ST impact on sale of dried red Chilli procured directly from farmers and sold to wholesalers<br> Query (Issue) Started By: - Raam Srinivasan Swaminathan Kalpathi Dated:- 28-6-2026 Last Reply Date:- 30-6-2026 Goods and Services Tax - GST<br>Got 6 Replies<br>GST<br>A person buys dried red chilli (HSN 09042110) directly from farmers and sells it to wholesalers charging GST of 5%. Is this rate correct....
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....? 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 Reply By KALLESHAMURTHY MURTHY K.N.: The Reply: Sir, Dry red chillies are considered agricultural produce, if sold directly by the Farmer to a wholesaler after loading, unloading, p....
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....acking, storage or warehousing, but not "pre-packaged and labelled", do not attract GST. The exemption applies only to raw, sun-dried chilli. If the chilli is processed, powdered, branded, or packed in retail unit containers will attract GST @ 5% as per amended Notification No. 6/2022 dated 13th July, 2022. If a person who buys chillies from farmers and sells to a wholesaler in bags would be tr....
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....eated as a commission agent or acting as a pure agent, and does not take ownership of the commodity, either the principal that is the farmer or the wholesaler is responsible for GST @5%. Reply By Ryan Vaz: The Reply: Question 1: If the person is selling dried red chilli (HSN 09042110) in a manner that is taxable, charging GST @ 5% is correct. HSN 09042110 falls under the 5% GST schedule. ....
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.... Question 2: Merely being unbranded is not sufficient to decide taxability after 18 July 2022. The relevant test is whether the goods are "pre-packaged and labelled" under the Legal Metrology law. If the dried chillies are sold: • Loose, or • In gunny bags that are not required to bear Legal Metrology declarations, then GST is generally not payable merely becaus....
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....e they are in bags. Reply By Sadanand Bulbule: The Reply: Even if a person/trader buys dried red chillies (HSN 09042110) directly from farmers and sells them in unbranded gunny bags to wholesalers, the transaction remains taxable at 5% tax. While loose, open sales in a local retail market can be exempt subject to threshold limit, bulk trading of whole dried chillies in gunny bags or sacks doe....
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....s not qualify for tax exemption, regardless of the brand status or Legal Metrology rules. The person/trader must charge 5% GST on all invoices to the wholesalers. Reply By KALLESHAMURTHY MURTHY K.N.: The Reply: Sir, More clarity from Sri Sadanand Bulbule Sir. Reply By KASTURI SETHI: The Reply: Dea Sir, Also go through the following AAR :- 2019 (10) TMI 615 - AUTHORITY FOR ADVANC....
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....E RULING, KARNATAKA - IN RE : MORIGERI TRADERS COMMISSION AGENTS Reply By Raam Srinivasan Swaminathan Kalpathi: The Reply: Heartfelt thanks to all the experts who have spent their most valuable time in clarifying the issue raised. Most obliged.<br> Discussion Forum - Knowledge Sharing ....