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2019 (4) TMI 74 - AAR - GSTClassification of goods - rate of tax - sun-cured “Tobaco leaves” Known in Kerala as purchased from farmers of Puliyampatti areas of Tamil Nadu used only for chewing by consumers in Kerala - whether taxable at 5% (CGST + KGST) classifiable under Serial No. 109 of the Schedule I of Notification No. 1/2017 - Central Tax (Rate) dated 28-06-2017 or 28% classifiable under Serial No. 13 of Schedule IV of the said notification? - Held that:- The produce “Kannipukayila” is nothing but tobacco leaves which are covered under Chapter 24 of Customs Tariff Act, 1975. As per HSN Code 2401, tobacco heaves are taxable at 5% GST. It is clarified that “tobacco” means any form of tobacco. whether cured or uncured and whether manufactured or not. and includes the leaves. stalks and stems of the tobacco plants, but does not include any part of the tobacco plants while still attached to the earth. Accordingly, “tobacco leaves” in any form. i.e. cured and uncured including leaves. stalks, and stems of the tobacco plant comes under entry 109 of First Schedule. The tobacco leaves including the leaves cut from plant. dry leaves. cured leaves by applying natural process ordinarily used by the farmers to make them fit to be taken go market shall qualify 5% tax rate. It is a common knowledge that without curing tobacco leaves cannot be consumed. The curing in relation to tobacco leaves, means removal of moisture from the tobacco leaves. Section 2(c) of Central Excise Act, 1944 specified that the term “curing” includes wilting, drying, fermenting and any process for rendering an unmanufactured product fit for marketing or manufacture. Hence. the unavoidable process of curing of tobacco leaves to make it fit for marketing will qualify the word “curing” mentioned in Chapter 24 of Customs Tariff Act, 1975.
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