Previous Year Question
Consider the following items:
Cereal grains hulled
Chicken eggs cooked
Fish processed and canned
Newspapers containing advertising material
Which of the above items is/are exempted under GST (Goods and Services Tax)?
1 only
2 and 3 only
1, 2 and 4 only
1, 2, 3 and 4
Correct Answer: C
Detailed Solution
The answer has to be determined according to the GST rate and exemption schedules applicable when the question was asked in 2018.
Item 1: Cereal grains hulled—exempt
The cereal grains hulled referred to in the question were covered by the applicable exempt category. GST treatment of food grains depends upon factors such as the precise tariff description, degree of processing and packaging or branding status.
Therefore, Item 1 is correct.
Item 2: Chicken eggs cooked—exempt
Birds’ eggs—whether:
Fresh in shell,
Preserved, or
Cooked,
were covered by the prescribed exemption entry. Therefore, cooked chicken eggs were exempt for the purpose of this question.
Item 2 is correct.
Item 3: Fish processed and canned—not exempt
Fresh or chilled fish and processed or canned fish do not receive identical GST treatment.
Processing and canning involve preservation, packaging and value addition. Processed and canned fish consequently fell within a taxable category and could not claim the exemption applicable to specified forms of unprocessed fish.
Item 3 is incorrect.
Item 4: Newspapers containing advertising material—exempt
Printed newspapers were covered by the GST exemption. The presence of advertisements in a newspaper did not remove its classification as a newspaper.
The supply of a newspaper containing advertisements and the separate provision of an advertising service are distinct transactions. Advertising services may be taxable, but a newspaper containing advertising material remained an exempt good.