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Gst on unbranded rice

srikumar (audit staff) (1203 Points)

06 June 2020

sir, my client has traders, sell rice to people. now gst is liable or exempt?.
some one says rice is exempt you wil get affidavit, otherwise taxable. now I am trader gst is exempt or not sir?
pls clarify sir

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23 Replies

KRISSHNAN KP (4215 Points)
Replied 06 June 2020

Your client is registered trader or not

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Shivam RC (Student) (23683 Points)
Replied 06 June 2020

@ Srikumar Sir,

If the Rice is being sold under a Registered Brand Name ( like India Gate, Fortune etc ), then it is Taxable. The applicable Rate of GST is 5%.

However if no Brand Name is associated ( Non-Brand Items ), then it is EXEMPTED vide Notification No. 2/2017 - Central Tax ( Rate ), dated 28.06.2017. GST Not applicable. It's an Exempt Supply. Moreover as per the Provision of Section 23(1) of the CGST Act 2017, Person's dealing in Exclusive Supply of Exempt Goods are not liable to take GST Registration.

Regards,
Shivam RC.

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srikumar (audit staff) (1203 Points)
Replied 06 June 2020

He is trader, also sell other goods like milk, rice, organic foods

Shivam RC (Student) (23683 Points)
Replied 06 June 2020

Then if his Aggregate Turnover exceeds Rs. 40 lakhs ( assuming him to be dealing in EXCLUSIVE SUPPLY OF GOODS ), he has to opt for GST Registration. Aggregate Turnover includes both Exempt as well as Taxable Supplies.

srikumar (audit staff) (1203 Points)
Replied 06 June 2020

Taxable and exempt turnover was 8 lakhs

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Shivam RC (Student) (23683 Points)
Replied 06 June 2020

Then not required to take GST Registration

srikumar (audit staff) (1203 Points)
Replied 06 June 2020

He already registered at fy 17-18 ,

Shivam RC (Student) (23683 Points)
Replied 06 June 2020

Then the Trader needs to collect GST on Goods supplied by him according to the GST Rates prescribed under Notification No. 1/2017 - Central Tax ( Rate ), dated 28th June 2017 as amended from time to time.

For Exempted Goods, he will not collect GST. He needs to issue Invoice cum Bill of Supply when both Taxable and Exempted Goods are supplied together.

As far as the Rice is concerned, as replied earlier if it is Branded Rice then GST @ 5% is applicable. If Non-Branded Rice, No GST applicable.

srikumar (audit staff) (1203 Points)
Replied 06 June 2020

Sales to end user i.e. public people by cash sales by raise invoice with gst and exempt goods also

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 07 June 2020

Unbranded Rice is Exempted in GST.
(Refer S.no.70 under Notification 2/2017 CT (R) )

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srikumar (audit staff) (1203 Points)
Replied 07 June 2020

Thanks sir

Shivam RC (Student) (23683 Points)
Replied 07 June 2020

Let's us understand the situation with the help of an example :

SAMPLE TAX INVOICE CUM BILL OF SUPPLY :

A2Z Traders
GSTIN : 19AANFN4054D1Z2
Date : 07.06.2020.

1). Unbranded Rice (5kg ) @ GST 0% = Rs. 150
2). Branded Rice ( say Fortune ) @ GST 5% = Rs. 250.
3). Branded Dal ( Tata Sampanna ) @ GST 5% = Rs. 140.
4). Pappad @ GST 0% = Rs. 50/-

Total Amount = Rs. 590/-
CGST @ 5% (say) = Rs. 50.
SGST @ 5% (say) = Rs. 50.

Understood Sir ???

For Taxable goods charge the applicable Rate of GST whereas for Exempt Goods, no GST will be charged.

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