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2018 (10) TMI 306 - AAR - GSTClassification of goods - Waste/by-product - Mahua De-oiled cake - input credit - Whether Mahua De-oiled cake (De-oiled Rice Bran being used as an ingredient of Cattle Feed, Poultry Feed and other animal feeds and is 'Waste generated' during the solvent extraction process? - Whether the applicant is eligible to get entire tax input credit of GST paid on purchase of Mahua Oil Cake/ Rice Bran Oil cake used in the manufacture of solvent extracted oil? Held that:- When common inputs are being used for both taxable and exempted supplies, the party is required to reverse the credit proportional to the amount of credit pertaining to the exempted supplies. ITC can be availed only on goods and services for business purposes. If they are used for non-business (personal) purposes, or for making exempt supplies ITC cannot be claimed. From Classification of various goods it can be seen that de-oiled mahua cake and de-oiled rice bran emerging as by-products after the process of manufacture fall under HSN 2308 and 2309 - Mahua de-oiled cake has been described rich in sugers, nitrogen and proteins but also there is presence of some toxic saponins which limits its usages as fish or cattle feed. However, on mixing further with some other vegetable and cereal waste its usage in cattle feeding and fish feeding are usual in practice. De-oiled rice bran has been seen in its usage in largely cattle feed, poultry and fish feed. Thus, de-oiled cake which is used for animal feed has been exempted by the Entry 102 and de-oiled rice bran has been specifically exempted under Entry 102A. Ruling:- Mahua De-oiled cake/De-oiIed Rice Bran is a by-product occurred during the solvent extraction process, which is used as an ingredient of Cattle Feed, Poultry Feed and Other animal feeds. The input credit of GST paid on purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent extracted oil is partially allowed as per process/ formula prescribed in the Chapter V (INPUT TAX CREDIT) of GST Rules, 2017, because, the applicant manufacturing both taxable and exempted goods by using raw materials viz Mahua De-oiled cake and De-oiled Rice Bran. Further, if common inputs are used for both taxable and exempted supplies, the applicant is required to reverse the credit proportional to the amount of credit pertaining to the exempted supplies immediately.
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