GST @ 5% on Fortified Rice Kernel-Notification issued!

On January 16, 2025, the Ministry of Finance, Department of Revenue, issued two important notifications—Notification No. 01/2025 and Notification No. 03/2025—which bring amendments to tax rates and definitions concerning Fortified Rice Kernel (FRK), and improve clarity regarding pre-packaged goods.

Let’s understand the details!

Notification No. 01/2025 - Central Tax (Rate) dated 16.01.2025:

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

Date: 16.01.2025

Notification No. 01/2025 - Central Tax (Rate)

G.S.R. 50(E).- In exercise of the powers conferred by sub-section (1) of section 9 and sub-section (5) of section 15 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), No. 1/2017-Central Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 673(E), dated the 28th June, 2017, namely:-

In the said notification, -

(a) In the Schedule I - 2.5%, after S. No. 98A and the entries relating thereto, the following S. No. and entries shall be inserted, namely: -

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(b) In the Schedule III - 9%, against S. No. 15, in column (3), after the words "commonly known as Murki", the words ", Fortified Rice Kernel (FRK)" shall be inserted;

(c) After the Schedule VII, in the Explanation, for clause (ii) and the proviso appended to it, the following clause shall be substituted, namely: -

"(ii) The expression 'pre-packaged and labelled' means all commodities that are intended for retail sale and containing not more than 25 kg or 25 litres, which are 'pre-packed' as defined in clause (l) of section 2 of the Legal Metrology Act, 2009 (1 of 2010) where, the package in which the commodity is pre-packed or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder.".

2. This notification shall come into force with immediate effect.

[F. No. 190354/2/2025-TRU]

AMREETA TITUS, Dy. Secy.

Note: -The principal notification No. 1/2017-Central Tax (Rate), dated the 28th June 2017, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 673(E), dated the 28th June 2017, and was last amended vide notification No. 5/2024 - Central Tax (Rate), dated the 08th October 2024, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 611(E), dated the 08th October 2024.

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Notification No. 03/2025 - Central Tax (Rate) dated 16.01.2025:

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

Date: 16.01.2025

Notification No. 03/2025 - Central Tax (Rate)

G.S.R. 56(E).- 1. In exercise of the powers conferred by sub-section (1) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 39/2017-Central Tax (Rate), dated the 18th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1310(E), dated the 18th October 2017, namely:-

In the said notification, in the Table, against S. No. 1, in column 3, after the end of words and symbols "(b) Fortified Rice Kernel (Premix) supply for ICDS or similar scheme duly approved by the Central Government or any State Government", the words and symbols, "(c) food inputs for (a) above." shall be inserted.

2. This notification shall come into force with immediate effect.

[F. No. 190354/2/2025-TRU]

AMREETA TITUS, Dy. Secy.

Note:- The principal notification No. 39/2017- Central Tax (Rate), dated the 18th October 2017, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 1310(E), dated the 18th October 2017 and was last amended vide notification No. 11/2021 - Central Tax (Rate), dated the 30th September 2021, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 696(E), dated the 30th September, 2021.

Key Highlights

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1. Fortified Rice Kernel (FRK)- GST Rate specified:
   • Notification No. 01/2025 introduces the Fortified Rice Kernel (FRK) into the GST framework by applying a 5% tax rate under Schedule I at S. No. 98B having HSN 1904.
   • Additionally, the 18% GST Schedule has been updated to specifically exclude FRK alongside other products from the 18% GST rate.
2. Definition of Pre-Packaged Goods:
   • The definition of "pre-packaged and labelled" goods has been amended as follows:

Definition before the amendment:

“The expression 'pre-packaged and labelled' means a 'pre-packaged commodity' as defined in clause (l) of section 2 of the Legal Metrology Act, 2009 (1 of 2010) where, the package in which the commodity is pre-packed or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder.

Provided that notwithstanding anything contained in the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder, as amended from time to time, the supply of agricultural farm produce in package(s) of commodities containing a quantity of more than 25 kilogram or 25 litre shall not be considered as a supply made within the scope of expression 'pre-packaged and labelled'.”

New definition applicable from 16.01.2025:

“The expression 'pre-packaged and labelled' means all commodities that are intended for retail sale and containing not more than 25 kg or 25 litres, which are 'pre-packed' as defined in clause (l) of section 2 of the Legal Metrology Act, 2009 (1 of 2010) where, the package in which the commodity is pre-packed or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder.”

The amended definition applies "pre-packaged and labelled" to all retail commodities in packages of ≤25 kg/litres, requiring compliance with the Legal Metrology Act. The earlier exclusion for agricultural produce is now applied on all commodities.

3. Amendment to other GST Provisions:
   • Notification No. 03/2025 amends Notification No. 39/2017 by inserting a new provision under S. No. 1, Column 3. This amendment adds the words, "food inputs for Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government" in a 5% GST Rate.

Conclusion

The recent amendments introduced through Notification No. 01/2025 and Notification No. 03/2025 by the Ministry of Finance, Department of Revenue, signify a strategic move to enhance the Goods and Services Tax (GST) framework in India. By incorporating the Fortified Rice Kernel (FRK) in 5% GST and providing clear guidelines on pre-packaged goods, these notifications aim to streamline tax classifications and support public health initiatives.

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