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2019 (3) TMI 1954 - AAAR - GSTClassification of goods - rejected wheat seeds - rejected paddy seeds - to be classified under Chapter 12 of the GST Tariff - HELD THAT:- A seed is liable to be rejected for not fulfilling any or all of the above characteristics. But this rejection only means that it has failed to pass the set parameters for a good quality seed. Such rejections cannot change its inherent character of being a grain of 'seed quality'. A pair of shoes manufactured by a branded company often gets rejected on quality issues, but it still will remain a pair of shoes, albeit with an added adjective 'rejected'. So, Sri Chandra's reasoning that once the seed is rejected it no longer remains a seed, is also not acceptable. For these reasons, 'rejected wheat or paddy seeds' cannot be covered by Entry Serial 63 covering Chapter 12 of the GST Tariff. The seeds of both wheat and paddy, rejected or otherwise, are also appropriately classifiable under Chapter 10 of the tariff ibid. In fact there are specific entries in the tariff. Chapter sub heading 1001 11 00 covers seeds of Durum wheat while 1001 91 00 covers seeds of other varieties of wheat. Similarly, Chapter sub heading 1006 10 10 covers paddy (rice) of seed quality. However, we find that 'NIL' rate of GST is applicable on these goods. If the rejected seeds are put up in a unit container and bearing a registered brand name or bearing a brand name on which an actionable claim or enforceable right in respect of such brand name has been foregone voluntarily, then the effective CGST & SGST rate on both will be 2.5% & 2.5%.
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