IN RE: SMITA GUPTA
GST
2018 (9) TMI 1418 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – [2018] 59 G S.T.R. 242 (AAR), 2018 (17) G. S. T. L. 438 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, RAJASTHAN – AAR
Dated:- 18-8-2018
AAR No. RAJ/AAR/2018-19/12
GST
NITIN WAPA AND SUDHIR SHARMA MEMBER
Present for the applicant: Mr. Ranjan Mehta, (CA) Authorised Representative
Note: Under Section 100 of the RGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of RGST Act 2017, within a period of30 days from the date of service of this order.
The Issue raised by the applicant is fit to pronounce advance ruling as it falls under ambit of the Section 97(2) (a), it is given as under:
(a) Classification of any goods or services or both;
Further, the applicant being a registered person, GSTIN is 08AEOPG3970K1Z1, as per the declaration given by him in Form ARA-01, the issue raised by the applicant is neith
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re supplied as part of a complete sprinkler or drip irrigation system and also as spares separately as and when required by farmer for replacement.
3. All above items are used by the farmers and most of the items do not have an independent use. They are used only as part of Sprinkler or Drip irrigation system for the purpose of irrigation only.
2. Taxability
The applicant stated that these items fall under Chapter 84 of the Customs Tariff Act, 1975 under heading 8424 which reads as follows:-
MECHANICAL APPLIANCES (WHETHER OR NOT HAND OPERATED) FOR PROJECTING, DISPERSING OR SPRAYING LIQUIDS OR POWDERS; FIRE EXTINGUISHERS, WHETHER OR NOT CHARGED; SPRAY GUNS AND SIMILAR APPLIANCES; STEAM OR SAND BLASTING MACHINES AND SIMILAR JET PROJECTING MACHINES.
These items are used in the process of irrigation by means of which water is dispersed or sprayed on to the plants.
For heading 8424 there are 3 entries of taxation in notification no 01 / 2017 Central Tax (Rate) dated 28.06.2017, as ame
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no 27/2017 Central Tax (Rate) dated 22.09.2017 and 06/2018 Central Tax (Rate) dated 25-01-2018
5. Till 22.09.2017 all the items listed under tariff heading 8424 were taxable @ 18% (9% CGST + 9% SGST) vide entry no 345 of schedule III of notification no 01/2017.
6. Vide notification no 27/2017 dated 22.09.2017 nozzles of the sprinklers and the drip irrigation system were carved out of this entry no 345 of schedule III of Notification no 01/2017and were put into Schedule II as entry no 195A to be taxed @ 12% after representations were made from various sections of the industry being an agricultural input.
7. The nozzles form a very small part of these irrigation systems (Although an important one), later vide notification no. 06/2018 dated 25.01.2018 a new entry was introduced as entry no 195B “Sprinklers; drip irrigation system including laterals; mechanical sprayers”. This entry included all the lateral parts of these irrigation systems into Schedule Il also, in addition to the Nozz
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used to irrigate agricultural crops, lawns, landscapes, golf courses, and other areas. They are also used for cooling and for the control of airborne dust. Sprinkler irrigation is a method of applying irrigation water which is similar to natural rainfall. Water is distributed through a system of pipes usually by pumping”
Sprinkler include firing Nozzle, pipes, clamps, foot buttons and different other items through which the system works.
Drip Irrigation is also not defined in the law. However its definition as per various sources is as follows:-
“Drip irrigation, which is also sometimes referred to as micro-irrigation or trickle irrigation, consists of a network of pipes, tubing valves, and emitters. Drip in-igation is defined as any watering system that delivers a slow moving supply of water at a gradual rate directly to the soil”
This system also includes nozzles, pipes, clamps, elbow, tee etc. to form a complete system and work.
10. The applicant contented that the items supp
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3 Personal Hearing (PH)
In the matter personal hearing was given to the applicant, Mr. Ranjan Mehta, CA, (Authorised Representative) of applicant appeared for personal hearing on 20.07.2018. During the PH he reiterated that the case may be decided as per submission already made in the application for Advance Ruling. He has sought time to submit statements regarding the explanation of Sprinkler system vis-å-vis Sprinkler which was submitted on a later date. Further, he has requested to decide the case at the earliest.
4. The jurisdictional officer in her comments has stated that the Entry relating to Sprinkler does not include Sprinkler irrigation system nor does it include laterals. Hence, the goods in question will attract 12% GST(SGST 6% + CGST 6%).
5. Findings and analysis:
Before we set to decide the issues raised in Advance Ruling Application we should analyse and understand the meaning of certain relevant items/commodities relating to entries of the notification in qu
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m usually consists of the following components:
(i) A Pumping Unit
(ii) Tubings- main/sub-mains and laterals
(iii) Couplers
(iv) Sprinkler head
(v) Other accessories and laterals such as valves, bends, plugs and risers.
(i) Pumping Unit: Sprinkler irrigation systems distribute water by spraying it over the fields. The water is pumped under pressure to the fields. The pressure forces the water through sprinklers or through perforations or nozzles in pipelines and then forms a spray.
(ii) Tubings: Mains/submains and laterals: The tubings consist of mainline, submanins and laterals. Main line conveys water from the source and distributes it to the submains. The submains convey water to the laterals which in turn supply water to the sprinklers.
(iii) Couplers: Couplers are used for connecting two pipes and uncoupling quickly and easily.
(iv) Sprinkler Head: Sprinkler head distribute water uniformly over the field without runoff or excessive loss due to deep percolation. Different
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he roots of plants, either from above the soil surface or buried below the surface. The goal is to place water directly into the root zone and minimize evaporation. Drip irrigation systems distribute water through a network of valves, pipes, tubing, and emitters.
Components of Drip Irrigation System: A typical system consists of a source of water supply, pumping unit, main lines, laterals and emitters. Auxiliary components include filters, pressure regulators, valves and equipment for mixing fertilizers etc.
1. Filters: Filters are used to remove undesirable material from the water supply before it enters the distribution system and creates the potential for emitter clogging.
2. Main lines: The main line carries the water from the filtration system to the submain.
3. Submain: The submain distribute the water from main line to the laterals.
4. Laterals: The lateral distribute water to the emitter which deliver water directly to the root zone.
5. Emitters or drippers: The dripper o
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mmet. Grommet acts as a seal. The sizes are different for 12 mm and 16 mm laterals.
12. End cap: They are used to close the lateral ends, submain ends or main ends. Submains and mains are preferably provided with flush valve.
13. Fertilizer system: It is used to add the chemicals (nutrients, herbicides, pesticides etc.) to the irrigation water.
d) Laterals:
Meaning of Laterals
“relating to the sides of an object or plant or to sideways movement”
“something that is extending to the side or moving to the side”
6. Conclusion :
The applicant has contended that along with nozzles later vide notification no. 06/2018 dated 25.01.2018 a new entry was introduced as entry no 195B “Sprinklers; drip irrigation system including laterals; mechanical sprayers” which included all the lateral parts of these irrigation systems into Schedule II also .
On perusal of above entry it is clear that laterals related only to drip irrigation systems have been covered under this entry and laterals of spr
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e), Latch clamps, C clamps, Riser Pipes, Rubber Rings, Tee, Clamps, Foot button, Ripit, Nozzle are all laterals to the sprinklers which when assembled with sprinkler constitutes Sprinkler Irrigation System.
In case of drip irrigation system as per entry No.195A and 195 B of the schedule II of Notification No. 1/2017 – CT (Rate) dated 28-6-2017, later amended by Notification No.27/2017 CT- (Rate) dated 22.09.2017 and 6/2018 – CT (Rate) dated 25-1-2018 respectively, covers “Nozzles for drip irrigation equipments” and “drip irrigation system including laterals” and would attract GST (CGST 6% + SGST 6%).
In case of Sprinklers as per entry No. 195A and 195 B of the schedule II of Notification No. 1/2017 – CT (Rate) dated 28-6-2017, later amended by Notification No. 27/2017 CT- (Rate) dated 22.09.2017 and 6/2018 – CT (Rate) dated 25-1-2018 respectively covers only “Nozzles for Sprinkler” and “Sprinklers” which would attract GST 12% (CGST 6% + SGST 6%).
As discussed above, unlike as in the
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