No GST on Fortification and Packing of Whole Wheat Grains for Distribution Under Public Distribution System | AAR

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  • Last Updated on 13 September, 2023

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GST on Fortification and Packing

Case Details: Authority for Advance Rulings, West Bengal Aryan Flour Mills (P.) Ltd., In re - [2023] 154 taxmann.com 208 (AAR-WEST BENGAL)

Judiciary and Counsel Details

    • Tanisha Dutta & Joyjit Banik, Member
    • Manish Raj Dhandharia, FCA for the Applicant.

Facts of the Case

The applicant was engaged in providing services of crushing wheat provided by the State Government, into fortified atta which in turn would be supplied by the State Government through Public Distribution System. It filed an application for advance ruling to determine taxability of services provided to the State Government.

AAR Held

The Authority for Advance Ruling noted that composite supply of goods and services in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply provided to the Central Government or State Government would be exempt from GST.

In the instant case, the nutrients added in the atta as fortification process cannot be considered as a separate/distinct supply of goods in addition to the service of milling of wheat into flour as it is an integral part of the process of such conversion and value of goods involved in such composite supply would not exceed 25 per cent of value of supply. Therefore, the composite supply of services to Food and Supplies Department of State Government by way of milling of whole wheat grains provided by State Government, its fortification and packing for distribution under Public Distribution System would be eligible for exemption.

List of Cases Referred to

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