Frozen shrimp in packages up to 25 kilograms that have labels and pre-packaged are subject to GST.

Background

• The applicant, M/s. Asvini Fisheries Private Limited, exports processed frozen shrimp.
• They source shrimp locally, process them, and pack them based on customer requirements.
• The packaging includes both inner pouches/boxes and outer master cartons.
• The weight of the inner packaging ranges from 250 grams to 2 kilograms.
• The applicant wants to understand if GST applies to their exports under the new tax regime.

Key Issues

1. Does GST apply to exported processed frozen shrimp packed in individual printed pouches/boxes (with buyer-provided designs, labels, etc.) further packed in printed master cartons (up to 25 kgs)?
2. Does GST apply to exported processed frozen shrimp packed in individual plain pouches/boxes further packed in plain master cartons (up to 25 kgs)?

Applicant's Contentions

• They classify their product under Chapter 0306 of the Harmonized System of Nomenclature (HSN).
• Previously, they paid GST at the rate specified in Notification No. 02/2017-Central Tax (Rate).
• Notification No. 06/2022-Central Tax (Rate) amended the previous notification, making "pre-packaged and labelled" crustaceans (including shrimp) taxable at 5% (CGST 2.5% + SGST 2.5%).
• The applicant argues that "pre-packaged and labelled" under the GST regime refers to the Legal Metrology Act, 2009 definition.
• This Act defines "pre-packaged commodity" as one with a predetermined quantity, requiring specific declarations on the packaging.

Applicant's Interpretation

• Based on the weight (less than or equal to 25 kgs) and buyer-provided information on the inner packaging, they believe it falls under the "pre-packaged and labelled" category.
• Therefore, they understand GST to be applicable on their exports, irrespective of domestic sale or export.
• They cite relevant case studies supporting their interpretation.

Authority's Analysis

• The authority agrees that the relevant notification applies a 5% GST rate to "pre-packaged and labelled" crustaceans.
• They concur with the applicant's definition of "pre-packaged and labelled" based on the Legal Metrology Act, 2009.
• The Act mandates declarations on pre-packaged commodities, with no exemption for exports.
• The authority concludes that shrimp exports in pre-packaged and labelled inner bags (less than or equal to 25 kgs) attract GST at 5%, regardless of domestic sale or export.

Topic-Asvini Fisheries Private Limited

Citation-2024 TAXONATION 1141 (TAMILNADU-AAR)

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