5% GST Payable On Pre-Packaged And Labelled Jaggery: Karnataka AAR

The Karnataka Authority of Advance Ruling (AAR) has held 5% GST on pre-packaged and labeled jaggery.

The two-judge bench of M.P. Ravi Prasad and Kiran Reddy T. found that all types of jaggery, pre-packaged and labeled, are covered by S. No. 91A of Notification No. 1/2017 Central Tax (Rate) dated June 28, 2017.

The applicant is a partnership firm and is engaged in the sale of jaggery.

The applicant stated that jaggery is exempt from GST as per SI No. 94 of Notification No. 2/2017-Central Tax (Rate), dated June 28, 2017. They have also stated that as per Notification No. 6/2022-Central Tax (Rate) dated July 13, 2022, jaggery of all types, including cane jaggery (gur), palmyra jaggery, pre-packaged and labeled, and Khandsari sugar, pre-packaged and labeled, has been inserted into Schedule 1-2.5% at Sl. No.91 A under the HSN codes 1701 and 1702.

The applicant states that they deal in jaggery, which is sold in wrapped, loose gunny sheets stitched with thread and weighing in 3 different sizes, i.e., 5 kg, 10 kg, and 30 kg. The farmer manufactures the jaggery mainly with sugar cane juice by mixing necessary chemicals in minor portions. The sugarcane juice is boiled in a big pot, and thereafter, the boiled sugarcane juice will be put in 5 kg, 10 kg, and 30 kg pots until it becomes cold, and after the cooling process is over, the sugarcane juice will be in the form of lumps (jaggery) of either 5 kg, 10 kg, or 30 kg. The weights of none of the lumps are comparable. It may either be more or less by some grams, i.e., the weight is not uniform even though the sizes are the same.

The Authority held that the entry 91A says jaggery of all types, including cane jaggery (gur), palm jaggery, pre-packaged and labeled, and Khandsari sugar, pre-packaged and labeled, is exigible to CGST at 2.5%. which means all types of jaggery that are prepackaged and labeled are exigible to CGST at 2.5%.

Applicant’s Name: Prakash and Company

Date: 23/01/2023

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