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2018 (12) TMI 142 - AAR - GSTClassification of goods - rate of GST - Neem Seed - neem seeds in frozen or dried form - neem seed powder - classification under HSN Code 1211 - whether classified under 0% GST Rate or 5% CST Rate - Held that:- From the entries under HSN code 1211 there is no ambiguity that Plants and parts of plants (including seed and fruits) used as "fresh or chilled" would be tax free, whereas plants and parts of plants (including seed and fruits) used as "frozen or dried, whether or not cut, crushed or powdered" would be taxable @ 5% GST - It is also observed that under HSN code - 1209, the Seed useful for sowing i.e. 'Seeds, fruit and spores of a kind used for sowing' is tax free. The crucial determination point here in this entry is the word 'sowing'. Thus in case the quality of seed is not suitable for sowing, it cannot be treated as of seed quality, thereby making it exigible to GST @ 5%. Currently in commercial sector 'dry neem fruit' is not identifiable with 'seed for sowing'. The Neem fruit is known as 'Nimouli' in Chhattisgarh and is collected in both fresh and dry forms and is used for making neem oil only, after drying the neem seed. Dry neem fruit is not generally used for trading for horticulture or agro-based commercial purpose i.e. dry neem fruit is not identifiable with seed commercially. Thus on the basis of 'common parlance' or 'trade parlance' theory too propagated by the applicant, the goods intended to be supplied by the applicant can by no stretch of imagination be categorized as those attracting tax @ 0%. The said goods to be supplied by the applicant does not fulfill the conditions mentioned under HSN code 1209 and 1211 neither in the 'specific form' nor 'specific use', as stipulated under GST Act to be categorized as attracting tax @ 0%. Ruling:- Supply of neem seeds in frozen or dried form for the purpose as specified by the applicant and the said seeds being not of seed quality, supplied by the agro-division business of the applicant would merit being taxable at 2.5% SGST and 2.5% CGST. Supply of neem seed powder for the intended purpose as specified by the applicant, supplied by the agro-division business of the applicant would be taxable at 2.5% SGST and 2.5% CGST.
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