Change in the definition of the expression pre-packaged for the supply of agricultural and food products

18-Jul-2024 05:11 PM

New Delhi. The Revenue Department of the Union Finance Ministry had issued a notification on July 12, 2024, saying that the supply of pre-packaged and labeled agricultural and food products in quantities of more than 25 kg or 25 liters will not be considered under the category of Scheme of Expression.

This had created confusion. It is worth noting that Goods and Services Tax (GST) is already applicable at the rate of 5 percent on products packing up to 25 kg, while GST is not levied on packing with quantities above this.

Misunderstanding had arisen due to the term scope of expression. Now the Revenue Department has issued a new circular saying that through two notifications issued on July 12, 2024, only the definition of free packaged and labeled supply has been amended.

Under this, it is not mandatory to use the term pre-packaged or labelled for agricultural/food products of quantity exceeding 25 kg or 25 litres and it is excluded from the scope of 25 kg/25 litre products. 25 kg/25 litre products will not attract 5% GST as applicable for packaging of quantity below this. 

For the removal of prevailing doubts, it is clarified that for the past period, the matter is hereby regulated on "as is where is" basis.

This means that the earlier rules applicable for 25 kg/25 litre products will continue and only its definition has been amended.