Branded vs unbranded: the 5% line
Rice sold loose or in bags without a registered brand name is exempt from GST. Rice sold in a unit container under a registered brand — or a brand on which the seller has not given up actionable claim — attracts 5% GST (2.5% CGST + 2.5% SGST within the state, 5% IGST outside). Many mills sell both, so the invoice must carry the right HSN (1006) and rate per line, not per invoice.
By-products are not exempt
Rice bran (HSN 2302) is taxed at 5%; de-oiled bran and husk have their own treatment. Mills that invoice bran to oil extractors as 'exempt' get notices years later. Set the rate at the product level once, and let the system apply it on every line.
Paddy purchases and reverse charge
Paddy is exempt, so purchases from farmers carry no GST and no reverse charge. Purchases of packing material, machinery spares and transport (GTA) do. Keep those bills in the same ledger as everything else so input credit is not lost at year end.
E-invoicing thresholds
E-invoicing is mandatory for businesses above the notified aggregate turnover threshold (₹5 crore at the time of writing). For a mid-size mill that threshold arrives sooner than owners expect because turnover counts exempt rice too. An IRN on every taxable invoice and an e-way bill on every load above ₹50,000 should be one click, not a separate portal login.
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