TMI Blog2022 (1) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of Soyabean oil, being principal input/ ingredient for manufacture or processing of Cattle feed and Poultry feed which may become value added product in the market. Soya husk being principal input/ ingredient to Poultry feed and Cattle feed industry, which is taxable @ 5% under Subheading 2304 as per Entry 105 of Notification No.1/17-Central Tax (Rate) dated, 28.06.2017. - Case Number 13/2021 and Order Number 20/2021 - - - Dated:- 27-12-2021 - SHRI MANOJ KUMAR CHOUBEY AND SHRI VIRENDRA KUMAR JAIN, MEMBER Present on behalf of applicant : S. Krishnan, Chartered Accountant PROCEEDINGS (Under sub-section (4) of Section 98 of Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods Service Tax Act, 2017) 1. The present application has been filed u/s 97 of the Central Goods and Services Tax Act, 2017 (hereinafter also referred to CGST Act and SGST Act respectively) by M/s ADANI WILMAR LIMITED (hereinafter referred to as the Applicant), registered under the Goods Services Tax. 2. The provisions of the CGST Act and MPGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e answer to question 1 is no, then the determination/ classification of correct tariff and rate of tax thereon under which soya husk resulting from extraction of Soyabean oil, being an input / ingredient to Cattle feed, will fall? 5. RECORD OF PERSONAL HEARING 5.1 Shri S, Krishnan, Chartered Accountant - Authorized Representative of the applicant appeared for personal hearing on behalf of the applicant and reiterated the submissions made in the application. The applicant states that - 5.2 SI.No.102 of Notification No.2/17-Central Tax (Rate) dated, 28.06.2017 exempting the goods from the whole of GST reads as under: - SI.No. Chapter/Heading/ Sub-heading/ Tariff item Description of goods 102 2301, 2302, 2308, 2309 Aquatic feed including shrimp feed and prawn feed, poultry feed cattle feed, including grass, hay straw, supplement husk of pulses, concentrates additives, wheat bran de-oiled cake (other than rice bran). 5.3 SI.No. 103A, 103B 105 of Notification No. 1 / 17-Central Tax (Rate) dated, 28.06.2017 prescribing GST rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2304 00 30 - Meal of soyabean, solvent extracted (defatted) 2304 00 90 -Other 5.6 A reference may be made to para 4 of Circular No.80/54/2018-GST dated, 31st December 2018 issued by CBIC, wherein certain clarifications are made with regard to raw materials/ inputs used to manufacture / formulation of Aquatic feed, animal feed, Poultry feed, Cattle feed etc under above Headings and Sub-headings. Para 4.2 of the said Circular reads as under;- 4.2 A number of raw materials such as fish meal falling under heading 2301 meat and bone meal also failing under heading 2301, oil cakes of various oil seeds, soya seeds, bran, sharps, residue of starch and all other goods falling under headings 2302, 2303, 2304 etc are used to manufacture/ formulation of aquatic feed, animal feed, cattle feed, poultry feed etc. These raw materials/ inputs cannot be directly used for feeding animal and cattle. The Larger Bench of the Hon. Supreme Court in the Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar (2018-361-E.L.T-577) has laid down that inputs for animal feed are different from the animal feed. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture / formulation of aquatic feed, animal feed, cattle feed, poultry feed cannot be covered under Entry 102 of Exemption Notification. (b) As per para 4 of Circular No.80/54/2018-GST dated, 31st December 2018, the exemption entry falling under entry 102 of Notification No.2/2017-Central Tax (Rate) dated, 28.06.2017 covers the prepared aquatic/ poultry / cattle feed falling under heading 2302. (c) The same goods falling under tariff 2302, is put to use other than poultry feed or cattle feed attract tax @5% (CGST @2.5% SGST @2.5%). (d) Further, there is a specific entry under tariff 2304 where the husk of soyabean may attract tax @5%. 5.12 As per the Rules of interpretation of HSN code, the specific entry shall prevail over the general entry i.e. soya husk is specifically covered under HSN 2304 attracting tax @5%. 5.13 As per Rule 3 of General Rules for the interpretation of import tariff, when any application of Rule 2(b) or for any other reason, goods are, prima-facie, classifiable under two or more headings , classification shall be effected as per sub-Rule (a), which reads as under:- The heading which provides the most specific description shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submissions made by the applicant in the application and during the time of personal hearing. 7.2 We find that the question before us essentially pertains to - (a) Classification of any goods or services or both. (b) Applicability of a notification issued under the provisions of this Act. (e) Determination of the liability to pay tax on any goods or services or both. 7.3 As per entry 102 of Exemption Schedule, aquatic feed including shrimp feed and prawn feed, poultry feed cattle feed, including grass, hay straw, supplement Et husk of pulses, concentrates additives, wheat bran de-oiled cake (other than rice bran) under Tariff item 2301, 2302, 2308 2309 are NIL rated and such items do not attract GST. Under the said entry, poultry feed and cattle feed of Tariff item 2302 are NIL rated. Chapter head 2302 does not specify the supplier or the recipient of goods i.e. Poultry feed and Cattle feed, to enjoy exemption from payment of GST under Entry 102 of Exemption Schedule. 7.4 Soya husk may also be covered under Tariff item 2302 50 00 as residue of Leguminous plants. 7.5 As per tariff item 2302, the said tariff item includes Bran, sharps and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SGST) under Chapter 2304. 7.16 However, in trade circles, there is perception that when soya husk is sold, it is exempt from payment of GST as Poultry feed and Cattle feed under Chapter 2302. 7.17 Further, there also exists the perception in trade circles that whenever soya husk is sold to a processing/ manufacturing unit of Poultry feed and Cattle feed, it will attract GST @5% under Chapter head 2304, as it is not sold as Poultry feed and Cattle feed. RULING (Under Section 98 of Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017) 8.1 Soya husk resulting from the extraction of Soyabean oil, being principal input/ ingredient for manufacture or processing of Cattle feed and Poultry feed which may become value added product in the market. Soya husk being principal input/ ingredient to Poultry feed and Cattle feed industry, which is taxable @ 5% under Subheading 2304 as per Entry 105 of Notification No.1/17-Central Tax (Rate) dated, 28.06.2017. 8.2 We are of the opinion that Soya husk will be covered by specific entry 105 of Schedule I attracting GST @5% (2.5% CGST 2.5% SGST) under Chapter 2304. 8.3 The ruling is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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