5% GST payable on all pre-packaged and labelled jaggery: Karnataka AAR

All kinds of pre-packaged and labelled jaggery draws five per cent goods and services tax (GST), ruled the Karnataka Authority for Advance Ruling (AAR).

The case relates to a partnership firm selling jaggery as a commission agent. Like many other agricultural commodities, jaggery was exempted from GST until July 18 last year. From that date, labelled and pre-packaged jaggery was brought under GST.

However, the company stated that it deals in jaggery, which is sold in wrapped loose gunny sheets stitched with thread and weighing in three sizes -- 5 kg, 10 kg, etc. It stated that the jaggery lumps are not packed in any content, and the weight of none of the lumps is the same as another.

AAR referred to the circular which brought in jaggery under GST. The circular says jaggery of all types, including cane jaggery (gur), palmyra jaggery, pre-packaged and labelled and khandsari sugar, pre-packaged and labelled, would attract five per cent GST.

This means all types of jaggery which are labelled and pre-packaged will attract 5 per cent GST, the authority said.

Sandeep Sehgal, partner tax at AKM Global, said the AAR ruled that all types of pre-packaged and labelled jaggery will be subject to GST at 5 per cent. "The circular's language seems to be much wider in scope," he said.