Understanding Notification No. 3/2024–Central Tax (Rate): Key Changes to GST on Agricultural Produce

Simplified Explanation of Notification No. 3/2024–Central Tax (Rate)

**1. Notification Overview:

This notification updates the rules regarding the GST exemption on certain goods, specifically addressing how agricultural farm produce is treated under GST regulations.

**2. Key Amendment:

**A. Clarification on Agricultural Farm Produce Packaging:

• Current Rule: Previously, agricultural farm produce packaged and labeled according to the Legal Metrology Act was considered “pre-packaged and labelled,” which affected its GST treatment.
• New Proviso Added:
  • Proviso Statement: Agricultural farm produce in packages larger than 25 kilograms or 25 liters will not be classified as “pre-packaged and labelled” under GST rules, despite the Legal Metrology Act’s requirements.

**3. Effective Date:

• This change will apply from July 15, 2024.

**4. Examples:

• Example 1: Large Packaging of Agricultural Produce:
  • If you buy a bag of rice that weighs 30 kilograms, it will not be considered “pre-packaged and labelled” for GST purposes. Therefore, it is not subject to the same GST rules that apply to smaller, pre-packaged goods.
• Example 2: Packaging Below the Threshold:
  • If a package of tomatoes weighs 20 kilograms, it would be classified as “pre-packaged and labelled” and subject to GST rules that apply to pre-packaged goods.

**5. Summary:

• New Rule: Agricultural farm produce packaged in quantities greater than 25 kg or 25 liters is exempt from certain GST labeling requirements.
• Effective Date: July 15, 2024