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TMI Blog2021 (6) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... t Bengal Authority for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression "GST Act" would mean the CGST Act and the WBGST Act both. 1.2 The applicant is stated to be a manufacturer of aerobic micro organism/ protein derived thereof which, according to the applicant, reduces the requirement of cement in all cementitious / concrete application. 1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made there under raising following question vide serial number 14 of the application in FORM GST ARA-01: What shall be the HSN Code and rate of tax applicable on supply of aerobic mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant claims that use of such isolated bacterium and its protein in concrete technology is unique and shall result in reduction in cement consumption and shall also improve the ecological footprint as production process of cement is second biggest cause of carbon dioxide generation globally. 2.5 For the purpose of classification of the goods so manufactured by him, the applicant has placed his reliance on following advance rulings stating that the supply involved in the instant case is similar to the ones wherein bio-fertilisers or anaerobic micro-organisms are supplied for further use as an organic manure or an organic fertiliser to increase the productivity of the soil and/or crop. (i) In the case of M/s. Rhizo Organic [Advance Ruling No. RAJ/AAR/2018-19/04 dated 16.06.2018], the AAR, Rajasthan has observed that bio-fertilizers are made of animals (micro-organism) and hence covered within the standard description of the HSN Code 3101. (ii) In the case of M/s. Elefo Biotech Pvt. Ltd. [Advance Ruling No. 18/2018-19 dated 06.02.2019], the AAR, Uttarakhand has observed that Anaerobic Microbial Inoculums (AMI) manufactured by the applicant will be classified under sub-heading 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are allowed to grow in a fermenter with the necessary growth medium. This solution after being centrifuged is disposed off resulting in required isolated bacterial cells. These microbial cells are sold in the market after being mixed with silica powder by putting it in a unit container. 3.6 Further, the applicant has developed its processes wherein it captively consumes the released bacterial cells generated from the above process for generation of the natural crude protein by way of further lysing of the released cells using a sonication machine. This protein on generation releases a pungent odour. To curb the odour, the released protein and the dead microbial cells are mixed with silica powder which is then sold in the market. 3.7 The applicant argues that he doesn't supply cultured solution of the micro-organism as interpreted by the department reiterating that culturing of instant microbes is an intervening process which is used to generate the final product: processed aerobic bacteria isolated from the cultured solution and / or the protein derived thereof. 3.8 The applicant further contends that the microbes mentioned in the above referred cases of M/s Rhizo Organic and M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here in the instant case, the applicant is simply dealing with only sonicated culture of microbes and no isolation or purification steps is further present. The product (culture of microbes) is assimilated with only silica and sold in the market. There is no value added steps at-all. 3.11 The applicant has already sold a few sample quantities of the developed product prior to its application before the Hon'ble bench of AAR precisely in the month of October, 2020 to test the effectiveness of the said goods in the market where tax has been inadvertently charged @ 18% considering the instant goods under the HSN code 3507. 4. Observations & Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised representative of the applicant during the course of personal hearing. We find that the applicant, vide his written submission, has declined to accept the view taken by the revenue that the goods manufactured by him is a "cultured solution of microorganism". However, the applicant has admitted that culturing of instant microbes is an intervening process which is used to generate the final product viz., processed aerobic bacte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds classification of the goods involved in the instant case. 4.5 The moot point to be decided in the instant case is the classification of the products, viz. processed aerobic bacteria isolated from the cultured solution and / or the protein derived thereof. It is found that there is no specific heading in the tariff for classification of the goods manufactured by the applicant. Moreover, we have already expressed our view that the goods involved in the instant case shall not be covered under chapter sub-heading 3101.00 of the heading 3101 as contended by the applicant or under HSN Code 3002 90 30 of the Central Excise Tariff Act, 1985 as submitted by the revenue. So, for the purpose of deciding the classification of the product in question, it is necessary now to analyse characteristics of the products manufactured by the applicant. 4.6 The nature, characteristic and uses of the goods, as claimed by the applicant, is summarised as under: * The goods shall be used in the concrete/cementitious mix to make mortar, plaster, bricks, ready mix concrete etc. * Use of such isolated bacterium and its protein in concrete technology shall result in reduction of cement consumption. * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NOT ELSEWHERE SPECIFIED OR INCLUDED * 3824 40 ........ Prepared additives for cements, mortars or concretes 4.10 So, we hold the view that the goods manufactured by the applicant shall be used as an additives in concrete technology for its basic property to enhance strength and durability along with imparting self-healing and therefore classifiable under tariff item 3824 40. We also find that goods under following description falling under Chapter / Heading / Sub-heading / Tariff item 3824 is specified in entry serial number 97 of Schedule-III of Notification No. 1/2017-Central Tax (Rate) dated 28-6-2017 (as amended) and corresponding W.B.State Tax Notification No. 1125 F.T. dated 28.06.2017(as amended): "Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included". In view of the above discussion, we rule as under: RULING The product, viz. aerobic micro organism/protein derived thereof used as a biological agent to reduce the requirement of cement in all cementitious / concrete application as manufactured and to be su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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