GST on Pre-packaged and Labeled items-Simplified

India's Goods and Services Tax (GST) is a comprehensive indirect tax on the supply of goods and services across India. It has replaced many indirect taxes that were previously levied by central and state governments. One area where GST has an impact is on pre-packaged and labeled items. In this article, we will discuss the GST implications on pre-packaged and labeled items in India.

Overview of Pre-packaged and Labeled items

Pre-packaged and labeled items are those items that are packed and labeled before they are sold to the customer. These items are sold in fixed quantities and sizes and comply with the standards and guidelines set by the regulatory authorities. Examples of pre-packaged and labeled items include biscuits, chips, soft drinks, and other similar food and beverage products.

GST on Pre-packaged and Labeled items

Under GST, pre-packaged and labeled items are classified under the HSN code 2106. This includes food preparations not elsewhere specified or included, which are put up in unit containers and intended for retail sale. GST on pre-packaged and labeled items is levied at the rate of 18%, which includes 9% CGST and 9% SGST.

It is important to note that GST is applicable only on the value of the product and not on the packaging. This means that if the cost of the product is Rs. 100 and the cost of the packaging is Rs. 20, then the GST will be levied only on the cost of the product, which is Rs. 100.

Exemptions on Pre-packaged and Labeled items

There are certain exemptions on pre-packaged and labeled items under GST. These include:

1. Pre-packaged and labeled goods that are exported from India are exempt from GST.

2. Pre-packaged and labeled goods that are supplied to the United Nations or an international organization are exempt from GST.

3. Pre-packaged and labeled goods that are supplied to a Special Economic Zone (SEZ) developer or unit are exempt from GST.

Conclusion

In conclusion, pre-packaged and labeled items are subject to GST in India. The rate of GST on these items is 18%, which includes 9% CGST and 9% SGST. It is important for businesses that deal with pre-packaged and labeled items to keep this in mind while calculating their tax liability under GST. The exemptions available under GST for pre-packaged and labeled items can also help businesses save on their tax liability.