FAQs on GST applicability on ‘pre-packaged and labelled’ goods

In India, the Goods and Services Tax (GST) has been implemented to streamline the taxation system in the country. It is a single tax system that has replaced several indirect taxes such as VAT, Service Tax, and Excise Duty. GST is applicable on all goods and services that are bought or sold in India, including pre-packaged and labelled goods. In this article, we will discuss some frequently asked questions (FAQs) about the GST applicability on pre-packaged and labelled goods.‍

What are pre-packaged and labelled goods?

‍Pre-packaged and labelled goods refer to products that are packaged and labelled in advance for retail sale. These are products that are sold to consumers in fixed quantities, and the packaging includes all the necessary information about the product such as the brand name, the ingredients, the manufacturing date, and the expiry date.

‍Is GST applicable on pre-packaged and labelled goods?

‍Yes, GST is applicable on pre-packaged and labelled goods. These products are considered as ‘goods’ under the GST Act, and are subject to the tax as per the applicable rate.

‍What is the GST rate for pre-packaged and labelled goods?

‍The GST rate for pre-packaged and labelled goods varies depending on the type of product. Some products fall under the 5% tax slab, while others are taxed at 12%, 18%, or 28%. For example, packaged food items such as biscuits and chocolates are taxed at 18%, while packaged juices are taxed at 12%.

‍What is the HSN code for pre-packaged and labelled goods?

‍HSN stands for Harmonized System of Nomenclature, which is a system of classification of goods used for trade around the world. The HSN code for pre-packaged and labelled goods is based on the product’s nature, composition, and use. Each pre-packaged and labelled product is assigned a unique HSN code that helps in determining the applicable tax rate.

‍Do pre-packaged and labelled goods require a separate GST registration?

‍If you are a manufacturer or a trader of pre-packaged and labelled goods, you need to register for GST if your annual turnover is more than Rs. 40 lakhs (Rs. 20 lakhs for the Northeastern states). However, if you are a small business operating under the composition scheme, you can pay a fixed percentage of your turnover as tax without the need for a separate GST registration.

‍Are there any exemptions for pre-packaged and labelled goods under GST?

‍Some pre-packaged and labelled goods are exempt from GST, such as fresh fruits and vegetables, milk, curd, and unbranded atta, maida, and besan. However, if these products are processed or packaged and labelled, they will be subject to GST at the applicable rate.

‍What is the penalty for non-compliance with GST regulations for pre-packaged and labelled goods?

‍If you fail to comply with the GST regulations for pre-packaged and labelled goods, you may be subject to penalties and interest. The penalty for non-registration under GST is 10% of the tax due, subject to a minimum of Rs. 10,000. If you do not file your GST returns on time, you may be charged a late fee of Rs. 100 per day (up to a maximum of Rs. 5,000).In conclusion, pre-packaged and labelled goods are subject to GST in India, and the applicable tax rate varies depending on the type of product. It is important for manufacturers and traders of these products to register for GST and comply with the regulations to avoid penalties and interest.