TMI Blog2018 (12) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... oth 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. - STC/AAR/04/2018 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is as below :- Type Meaning Oil Seed Seed that yields Oil Oleaginous Fruit Oily, or Rich in Oil, or Covered with Oil, or Producing Oil An oleaginous fruit is the part of a plant that is used to produce oil. It can be a fruit (for example olives), seed (for example sesame) or nut (for example walnuts) Grains Grain is a cereal crop that has been harvested and is used for food. Seed the unit of reproduction of a flowering plant, capable of developing into another such plant. Fruits the sweet and fleshy product of a tree or other plant that contains seed and can be eaten as food. Industrial or The application of goods covered under chapter Medicinal Plants 12 is not confined primarily to their agri-application, but also include their industrial OR medicinal applications. Straw and Fodder Various parts of the plant are used as a feed to animals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as their contention that Neem Seeds belong to goods of seeds quality, however the words seed quality has not been defined in CST legislature. In cases where specific words are not defined, common parlance/ trade parlance is to be given precedence. Understanding of HSN documents in conjunction with the applicable general interpretational rules have been humbly submitted. Therefore it was their contention that Neem Seed (in all forms) to be classified under 0% GST Tax slab. 5. Thus we find that M/s. G.N. Chemicals, 27/13 Nehru Nagar West, Bhilai, (C.G,) 490020, GSTIN 22AAFFG5162J1ZJ, the applicant is seeking clarity as regards the applicable rates for payment of GST on the aforesaid commodity that is Neem Seed, viz. whether the applicable rates should be @ 0% or 5%. 6. The legal position, Analysis and Discussion :- 6.1 The provisions for implementing the CGST Act and CGGST Act, 2017 are similar. Now we sequentially discuss the provisions that are applicable in the present case. 6.2 The following facts have been mentioned in the report received from the jurisdictional Office of the applicant i.e. O/o Assistant Commissioner, Circle-2 Durg, with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 2.5% SGST 2.5% 1211 Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar ose, fresh or chilled. CGST 0% SGST 0% Looking at the entries above, it is crystal clear that when goods falling in above entries are sold 'fresh or chilled' it will be taxable at 0% GST but when it is sold 'frozen or dried' it will be taxable at 5% GST. Apart from this, Chapter 12 of HSN code begins with the heading All goods other than of seed quality . Seed quality here essentially denotes seed which may be used for agricultural purpose. The capacity of the seeds is fully exerted only when it possess its own quality in terms of physical, physiological, genetic and health aspects. Seed quality is a relative term and means the degree of excellence when compared to an acceptable standard. The seeds having required standards of purity, germination and other attributes are referred to as quality seeds- Thus this chapter itself makes a very wide distinction at the outset between seeds per se and seed quality at the outset. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HSN DESCRIPTION RATE OF TAX 1211 Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, frozen or dried, whether or not cut, crushed or powdered. CGST 2.5% SGST 2.5% 1211 Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled. CGST 0% SGST 0% From the above 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. 6.7 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 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neem oil from the kernel of neem which they would acquire from the collection of dry neem fruits or purchase of the same and they would also sell organic manure made from the De-Oiled Cake and husk of Neem. This clearly goes on to establish that 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%. 7. In view of the deliberations and discussions as above, we pass the following order :- ORDER 8. The ruling so sought by the Applicant is accordingly answered as under :- In terms of Notification No. 1/2017-State Tax (Rate) No. F-10-43/2017/CT/V(69), Naya Raipur, Dated 28-6-2017, Serial No. 73, Chapter 1211 : (i) 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 (M/s. G.N. Chemicals, 27/13, Nehru Nagar-West, Bhilai, Chhattisgarh) would merit being taxable at 2.5% SGST and 2.5% CGST. (ii) Supply of neem seed powder for the i ..... 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