TMI Blog2023 (9) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... uring process. Though, the applicant and other dealers in similar trade line described it as tapioca flour, the commodity dealt with by the applicant more clearly fits into the specific description Residues of starch manufacturing and similar residues, (HSN 2303.10) - as per the dealers contention also this product is not fit for human consumption and it is actually used as animal feed and in manufacturing of adhesives. But, the goods classified under tariff head 1106 are meant for human consumption. The product dealt with by the applicant is classifiable under the tariff head 2303.10, Residues of starch manufacturing and similar residues, taxable @ 5%. Requirement of registration - HELD THAT:- In terms of Section 22 of the CGST Act, read with relevant provisions of SGST Act, the applicant is liable to be registered, if his aggregate turnover in a financial year exceeds the prescribed turnover under GST Law. - SHRI R. GOPALSAMY, I.R.S., AND SMT. N. USHA, MEMBER, 1. Any appeal against this Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Rulings, Chennai under Sub-section (1) of Section 100 of Central Goods and Service Tax Act / Tamil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods, and SI. No. 59 of Part C of First Schedule to the Act. (d) Whether such trader/ dealer is required to be registered. 2.0 The Applicants have stated, inter alia,- that they are registered dealers under the CGST/TNGST Acts 2017 and they are engaged in trading of purchase and sale of Tapioca Flour within and outside the State; that the said product is manufactured by their suppliers from inferior tapioca tubers procured from the farmers; better quality of tapioca tubers procured from farmers is used for manufacture of sago and starch; the inferior quality of tapioca tubers are dried in the yard, and then crushed into flour, and marketed; the said tapioca flour is chiefly used for cattle feed and very few quantity is also used for preparation of gum; the said goods are supplied in 50 Kgs/ 70 kgs Jute/Gunny bags, and not in smaller unit containers; the supplier of tapioca flour are not charging tax in the bill of supply issued by them, as they are not using any brand name or trade name; the supply of Tapioca flour is exempted goods under the CGST Act, IGST Act and respective SGST Act 2017, vide Notification No. 02/2017 Central Tax (Rate) dated 28.06.2017/and Notification No. 02/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to schedule I entry no 98, tariff item no. 1903 of CGST is taxed at 5% [notification No. 1/2017-Central Tax (Rate), dated 28th June 2017]. Entry no. 98, tariff item no. 1903 speaks about tapioca in the form of flakes, grains, pearls, and siftings or in similar forms or substitutes for tapioca prepared from of flakes, grains, pearls, siftings or in similar forms. Form the above description, it is understood that the item is wholly used as a Tapioca substitute. the applicant is claiming that his product is classifiable under HSN code 1106 and that it will fall under the entry No. 78 of schedule II for exempted goods. But, the words in the entry 1106 are Meal and powder of sago or of roots or tubers of heading 0714 and the description of HSN code 0714 is Manioc, arrowroot, sale, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, fresh or chilled, dried; Sago pith. Manoic is nothing but tapioca and pith is nothing but the spongy white tissue around the pulp of tapioca and sago pith is vernacularly known as Kappi and Thippi From the invoice submitted by the applicant along with the application for Advance Rulings, it is ascert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. 4.2 The Applicant has also submitted that he is primarily a dealer in purchase and sale of tapioca flour (falling under HSN Code 1106) without any brand name. The tapioca flour sold by the Applicant is unbranded, with no further process and blending, packed in 70Kgs gunny bags without any registered brand name. 4.3 Another Personal Hearing was held on 11.11.2022, as there was a change in the constitution of Members. In this Personal Hearing which was conducted virtually, the AR reiterated the submissions already made and explained the process briefly. AR furnished additional submission by way of a booklet containing copies of application, manufacturing process of product, invoice copies of purchase/sales, copies of relevant case laws and notification, copy of order no. 55/ARA/2019 dated 23.12.2019 in respect of M/s Mahalakshmi Store etc. The AR has explained about their product and also displayed sample of their product and raw material in sealed plastic sachets. 4.4 In response to the query by the members as to whether any Laboratory Test has been done on their product to determine its constituents, AR replied in the negative . Further on 17.11.2022, Applicant stated in a sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also used for preparation of gum. b. While explaining the manufacturing process in the form of Flow chart and also during the physical hearing conducted on 11.11.2022, the applicant and their AR have contended that, the product christened as tapioca flour is being prepared by drying and grinding the wet residue which is derived after extracting milk by crushing tapioca roots procured from agriculturalists. 5.2 The relevant entries related to the commodities Tapioca and Tapioca Flour as per Notification No. 1/2017, CT (R), dated 28.06.2017, is as detailed below; Tariff Item Description of goods Rate of Tax (CGST+ SGST) 0714 Manioc, Arrowroot, Salep, Jerusalem artichokes, Sweet potato and similar roots and tubers with high starch or inulin content, fresh, chilled, frozen or dried, whether or not sliced in the form of pallets; sago pith Nil 1106 Flour, meal and powder of the dried leguminous vegetables of heading 0713, of sago or of roots or tubers of heading 0714 or of the products of Chapter 8, Other than those put up in unit container and bearing a registered brand name. Flour, meal and powder of the dried leguminous vegetables of heading 0713, of sago or of roots or tubers of head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings 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 Honble 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. Therefore, the commodity is not classifiable under HSN 2309 as cattle feed which is exempted to tax. HSN Code 2309 would cover only such products, which in the form supplied, are capable of specific use as food supplement for animals and not capable of any general use. Therefore, the commodity dealt with by the applicant is classifiable under the following tariff heads; Tariff Head Description of goods Rate of Tax 2303.10 Residues of starch manufacture and similar residues 5% 5.11 In respect of the question No. 4, in terms of Section 22 of the CGST Act, read with relevant provisions of SGST Act, the applicant is liable to be registered, if his aggregate turnover in a financial year exceeds the prescribed turnover under GST Law. 6. In view of the above facts, we rule as un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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