TMI Blog2022 (12) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... amaged paddy (not fit for human consumption) would merit classification under chapter heading 1006 10, subject to stipulations and conditions as mentioned in the Section note and chapter note. Any further classification i.e., whether the rejected paddy/damaged paddy is of seed quality or other is not possible in absence of further description or technical information or parameters of the impugned goods. Applicable tax rate on such goods - HELD THAT:- There is no doubt that the same depends upon the classification of the goods in question as discussed above and the effective rates of such goods are specified in schedules appended to Notification no. 01/2017-CT(Rate) dated 28.6.2017 as amended and subject to the adherence of stipulations mentioned therein - the applicable rate of tax on all goods classifiable under chapter 10 i.e., cereals is 2.5% CGST 2.5%SGST, in terms of entry no. 45 to 59 (except sr. no. 57) to Schedule-I to Notification no. 01/2017-CT(Rate) dated 28.6.2017 as amended vide Notification No. 6/2022-Central Tax (Rate)New Delhi, the 13th July 2022, effective from 18.7.2022. In view of the section 103 of CGST Act, 2017, the ruling given IN RE: M/S. SAM OVERSEA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruling regarding classification applicability of GST on sale of Rejected Paddy Seed which has been informed to be not fit for human consumption could be used for Industrial Usage, Cattle Feed Production, Manure Production etc. In this regard, it has been informed by the applicant that they have recently been awarded tender by Chhattisgarh State Cooperative Marketing Federation for purchase of Rejected paddy and that out of the said purchase, certain portion could be sold as such. The applicant in the present case is planning for sale of Rejected Paddy in the bags having quantity of more than 25Kg. Relevant extract of tender documents issued by Chhattisgarh State Cooperative Marketing Federation having details of Rejected paddy categorized under different category of use such as Animal Feed, Cattle Feed, Poultry Feed, Industrial Use was also furnished. 2.2 - Question (s) on which advance ruling is sought: - i. Classification and applicability of GST Rate on the Sale of Rejected Paddy Seed in a bag of quantity more than 25Kg. ii. Applicability of S.No. 70 of Notification No. 02/2017 dated 28.06.2017. iii. Detemination of liability to pay tax on supply of rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Tax(Rate), Notification No. 07/2022 - Central Tax (Rate) both dated 13.07.2022 later the FAQ (F. No. 190354/172/2022-TRU dated 17.07.2022), provides the expression 'pre-packaged and labelled' means a 'pre-packaged commodity' as defined in clause (I) of section 2 of the Legal Metrology Act, 2009, where the package in which the commodity is pre-packed, or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act and the rules made there under. Clause (I) of section 2 of the Legal Metrology Act reads as below: (I) pre-packaged commodity means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a predetermined quantity. 3.6 That, in the context of food items (such as pulses, cereals like rice, wheat flour etc.), the supply of specified pre-packaged food articles would fall within the purview of the definition of 'pre-packaged commodity' under the Legal Metrology Act, 2009, and the rules made there under, if such pre-packaged and labelled packages contained a quantity upto 25 k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion: - At the very outset, we would like to make it clear that the provisions for implementing the CGST Act and the Chhattisgarh GST Act 2017 [hereinafter referred to as the CGST Act and the CGGST Act ) are similar and thus, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the CGGST Act, 2017. Now we proceed to discuss the issues involved in the ruling so sought by the applicant and the law as applicable in the present case. 6. Section 96 of CGST Act, 2017, Authority for advance ruling, stipulates as under: - Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory. Section 97(2) of CGST Act 2017 stipulates that: - The question, on which the advance ruling is sought under this Act, shall be in respect of- (a) classification of any goods or services or both; (b) applicability of a notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. In this context, it is worthwhile to mention here that Section 9 of the CGST Act and respective SGST Acts and Section 5 of IGST Act inter alia provides for levy of tax ..at such rates, not exceeding forty percent, as may be notified by the government on the recommendation of the council and collected in such manner as may be prescribed .. A plain reading of above provision implies that government has power to notify rates of tax on recommendation of GST council. The combined rate of CGST and SGST or IGST cannot be more than 40 per cent. The Customs Tariff Act 1975 is based on Harmonised System of Nomenclature, HSN. The Customs Tariff Act 1975 is amended from time to time so as to align the same with HSN Tariff developed by world customs organisation. Harmonised System of Nomenclature (HSN) The Harmonised Commodity Description and Coding System generally referred to as ''Harmonised System or simply HS is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). it is also referred to as Harmonised System of Nomenclature or HSN. The rules of Interpretation of Customs Tariff are also stipulated. The rules of interpreta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Durum wheat means wheat of the Triticum durum species and the hybrids derived from the inter-specific crossing of Triticum durum which have the same number (28) of chromosomes as that species. 9.3 It is further seen that Tariff Item 1006 specifies the goods classifiable therein, as under: - Tariff Item Description of goods 1006 RICE 1006 10 -Rice in the husk (paddy or rough) 1006 10 10 --Of seed quality 1006 10 90 --- Other . . 10. We find that to arrive at the correct ascertainment of classification of goods which is intended for supply (trade) downstream, it is also of paramount importance to know the description of the same as is forthcoming in the documents accompanying the goods on its receipt by the purchaser from the supplier. No such documents issued by Chhattisgarh State Cooperative Marketing Federation pertaining to such rejected paddy have been furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the classification of the goods in question as discussed above and the effective rates of such goods are specified in schedules appended to Notification no. 01/2017-CT(Rate) dated 28.6.2017 as amended and subject to the adherence of stipulations mentioned therein. 12.1 For ease of reference, the relevant portion of GST Notification No. 1/2017-Central Tax (Rate) dated 28 June 2017 as amended by Notification No. 6/2022-Central Tax (Rate)New Delhi, the 13th July 2022 effective from 18.7.2022 is reproduced here under: - GOVERNMENT O FINDIA MINISTRY OF FINANCE (Department of Revenue) NotificationNo.1 /2017-Central Tax Rate) New Delhi, the 28 th June,2017 G.S.R. (E).- in exercise of the powers conferred by sub-section (1) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the central tax of- i) 2.5 per cent. in respect of goods specified in Schedule I, (ii) 6 per cent. in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, (iv) 14 per cent. in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Notification no. 02/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no. 07 / 2022-Central Tax (Rate) dated 13.7.2022 is reproduced hereunder: - Schedule S.No. Chapter/Heading /Sub-heading/ Tariff item Description of Goods (1) (2) (3) 1. ----- -------- 2. ----- -------- 3. ----- -------- . ----- -------- 65.. 1001 Wheat and meslin other than pre-packaged and labelled 66. 1002 Rye other than pre-packaged and labelled 67 1003 Barley other than pre-packaged and labelled 68. 1004 Oats other than pre-packaged and labelled 69. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar the declarations under the provisions of the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder. However, if such specified commodities are supplied in a package that do not require declaration(s)/compliance(s) under the Legal Metrology Act, 2009 (1 of 2010), and the rules made thereunder, the same would not be treated as pre-packaged and labelled for the purposes of GST levy In the context of food items ( such as pulses, cereals like rice, wheat, flour etc.), the supply of specified pre-packaged food articles would fall within the purview of the definition of 'pre-packaged commodity' under the Legal Metrology Act, 2009, and the rules made thereunder, if such pre-packaged and labelled packages contained a quantity upto 25 kilogram (or 25 litre] in terms of rule 3 (a) of Legal Metrology (Packaged Commodities) Rules, 2011, subject to other exclusions provided in the Act and the Rules made thereunder. From the above it gets abundantly clear that only those goods of chapter 10, specifically described and listed out at Sr.no. 65 to 72 of the Notification no. 02/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no. 07 / 2022-Central Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this regard, as discussed classification of goods is dependent on the conditions stipulated per se and cannot be generalized. Ascertainment of classification of goods is much dependent on the circumstances and adherence to the conditions stipulated. Further as already discussed in the preceding para, section 103 of CGST Act, 2017 stipulates about the ruling pronounced as under: - The advance ruling pronounced by the Authority, or the Appellate Authority under this Chapter shall be binding only - a. On the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling; b. On the concerned officer or the jurisdictional officer in respect of the applicant. Thus, in view of the above section 103 of CGST Act, 2017, the ruling given in the cited case would be binding only on the relevant applicant and on the concerned officer or the jurisdictional officer as stipulated above Having regard to the facts and circumstances of the case and discussions as above, we pass the following order: - ORDER (Under section 98 of the Chhattisgarh Goods and Services Tax Act, 2017) No. STC/AAR/08/2022 Raipur Do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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