In Re: M/s. Uttara Impex Private limited
GST
2018 (12) TMI 141 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (20) G. S. T. L. 452 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 14-8-2018
GST-ARA-25/2018-19/B-88
GST
SHRI B.V. BORHADE AND SHRI PANKAJ KUMAR MEMBER)
PROCEEDINGS
(Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by UTTARA IMPEX PRIVATE LIMITED, the applicant, seeking and advance ruling in respect of the following issue.
* Classification of our products under GST regime.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a men
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
r this heading were exempted.
Under GST also there is similar description “Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of puIses, concentrates & additives, wheat bran & de-oiled cake” in the exemption Notification No. 2/2017-lntegrated Tax (Rate) dated 28th June, 2017, Notification No. 2/2017-Central Tax (Rate) dated 28th June, 2017 and Notification No. 2/2017-Union Territory Tax (Rate) dated 28th June, 2017 under HSN codes 2301, 2302, 2308, 2309. However, we are facing some ambiguity in correct classification of our products. In our view it shall be covered under the aforesaid HSN codes and effectively the products will be exempted. However, due to different technical description of the products, there can be another school of thought and the tax may be levied at different rates, by revenue authorities on the said products.
STATEMENT CONTAINING APPLICANTS INTERPRETATION OF LAW IN RESPECT OF THE QUESTI
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Agencies reported in (1991) 82 STC 353 = 1991 (3) TMI 345 – ANDHRA PRADESH HIGH COURT it is argued that the opinion of experts is a safe guide and a valuable source in interpreting and deciding as to whether the commodities are animal feed supplement. Copies of the opinion of the following experts are enclosed herewith in support of the contention of the applicant:-
1. Guangdong VTR Bio-tech Co. Ltd., China.
2. Sinochem Yunlong Co. Ltd., China.
3. Hulunbeier Northeast Fufeng Biotechnologies Co. Ltd., China.
4. Ajinomoto Eurolysine S.A.S., USA.
5. Alzchem Nutrition Gmbh, Germany.
The expression, “Animal feed and feed supplement”, used in the entry 5(i) of the First Schedule to the Act has not been defined or assigned any meaning under the said Act and Rules made thereunder. Therefore, any commodity which is sold as feed and feed supplement for specific class of animals, namely poultry, cattle, pig, fish, prawns and shrimps is covered by the entry of the First Schedule and quali
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e description that only those animal feed and feed supplements that are named therein are to be treated as covered by this HSN codes and those not named therein are to be excluded from the above HSN codes. A Feed supplement is a commodity that supplements animal feed.
Also it can be noted from import documents that the products are imported and commercially traded as animal feed and feed supplements.
The certificates issued by various companies clearly state that the aforementioned products are used as animal feed and feed supplements and these are not for medicinal use or human consumption. The certificates issued by quality control department of following above said companies are submitted on record.
In the case of Commissioner of Commercial Taxes, Uttar Pradesh Vs Ram Chandra Asha Ram, reported in (2001) 123 STC 415 = 2000 (3) TMI 975 – SUPREME COURT OF INDIA, the Hon'ble Supreme Court of India has held that damaged wheat unfit for human consumption and meant for use after proces
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ce it known as 'ice cream' and shall not be classified as 'other dairy produce', The same principal may be applied in the applicant's case also. That even if as per the technical description the products can be classified under any other heading but the products are finally used as poultry feed supplements.
2. Shree Baidyanath Ayurved Bhawan Ltd. 2009 (SC) = 2009 (4) TMI 6 – SUPREME COURT (The copy of said judgment is enclosed herewith):- It was held that Lal Dantmanjan is used routinely for dental hygiene. It is not 'medicament/medicine' as ordinarily medicine is prescribed by medical practitioner and is for limited use only. The same principal may be applied in the applicant's case also. That even if as per the technical description the products can be classified under any other heading but the products are finally used as poultry feed supplements.
3. CCE v. Wockhardt Life Sciences Ltd. 2012 (277) ELT 299 (SC) = 2012 (3) TMI 40 – SUPREME COURT OF INDIA (The copy of said judgment is
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
In addition to submissions made earlier, applicant also intends to submit the following:
We Uttara Impex Private Limited (“UIPL” or “Company” or “Applicant” or 'We”) holding GSTIN 27AABCU0589J120, mainly engaged in trading of various poultry feed products have filed above mentioned application for advance ruling.
In the course of its business the products namely DL Methonine, Bicarbonate, Phytase, Betaine, Monodicalcium, Tryptophan, UT Vit 50, Threonine, Lysine and Creamino are imported by us. The said products are feed supplements for consumptions as poultry feed only and are not capable of being used for any other use.
With respect of above products, the Company has made an application for obtaining advance ruling under section 96 of the CGST Act 2017 to sought the ruling on classification of the goods vide an application dated 17 May 2018 and have also made additional submission on 07 June 2018 and 25 July 2018 providing necessary documents as requested by your good office.
In
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
and nutrition value is as tabled below –
Sr.No.
Name of the product
Ingredients
Nutritional value
Remarks as to why it can be used in poultry feed
1.
DL-Methionine (Feed Grade)
Methionine
Act as methyl donor and used in protein synthesis. Essential Amino acid.
Methionine is a limiting and essential amino acid in poultry. so, need to supply through feed as feed supplement to meet standard requirement of birds for their body maintenance and egg/meat production.
2.
Sodium Bicarbonate (Feed Grade)
Sodium
To maintain Acid- balance in body (NRC, 1994)
Sodium bicarbonate used as source of sodium to maintain acid-base balance in poultry feed. Sodium required for maintains of dietary electrolyte balance in poultry feed.
3.
L-lysine (Feed Grade)
Lysine
Essential Amino acid and used in protein synthesis.
Lysine is a limiting and essential amino acid in poultry so need to supply through feed as feed supplement to meet standard requirement of birds for their body maintenance and
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Threonine is a limiting and essential amino acid in poultry to meet standard requirement of birds for their body maintenance and egg/meat production.
8.
Sodium sulphate (Feed Grade)
Sodium
To maintain Acid-balance in body
Sodium Sulphate used as source of sodium to maintain acid-base balance in poultry feed. Sodium required for maintains of dietary electrolyte balance in poultry feed.
9.
Lysine Sulphate (Feed Grade)
Lysine
Essential Amino acid and used in protein synthesis.
Lysine is a limiting and essential amino acid in poultry so need to supply through feed as feed supplement to meet standard requirement of birds for their body maintenance and egg/meat production.
Source: Requirement of above nutrients are adapted from Applied Nutrition by DV Reddy and research papers.
Further we have attached herewith following documents for your reference purpose
1. Advance ruling order passed by Government of Karnataka in the case of M/s. Max Chem Pharma. Attached herewith as an anne
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ity in correct classification of Products (which are those products is not specified in question). In companies view products shall be covered under the HSN CODES 2301, 2302, 2308, 2309 AND effectively products will be exempted. However due to technical description of the products, there can be another school of thought and the tax may be levied at different rates by revenue authorities on the said products.
SUBMISSION AND VIEW OF JURISDICTIONAL OFFICER
From the reading of application/ANNEXTURES submitted by the dealer, it is observed that;
1) The dealer is trading in Poultry feed products which are covered by CGST notification No. 2/2017. On which whole of central tax is exempted. The relevant entry is as follows:
Sr.No.
Chapter Heading
Description of goods.
102
2303, 2304, 2305, 2306, 2308, 2309
Aquatic feed including shrimp feed and prawn feed, poultry feed and cattle feed, including grass, hey and straw, supplement and husk of pulses, concentrate and additives, whe
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ese goods though not included in above mentioned poultry feed CGST notification No. 2/2017, GST shall not be levied on these goods also. According to dealer on the import documents, it is specified that these products are not for food or not for human consumption and those are of feed grade category, hence shall be classified under poultry feed and shall get exemption from GST.
4) Tax under GST levied as per commodity classified under HSN CODE and as per notification under the law only commodities covered by HSN CODE NO. 2302, 2304, 2305, 2306, 2308 and 2309 are classified as POULTRY FEED and exempted from GST. Thus while classifying poultry feed, law has excluded some entries like 2303/2307 from same HSN CHAPTER NO 23. On this background commodities which are classified and declared as taxable under HSN NO 2930/2922/3004 CANNOT BE CLASSIFIED AS POULTRY FEED.
5) The dealer's contention is not tenable. There are specific HSN codes and specific tax Rate entries for all these products.
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
r, Sr. Technical Manager appeared and made oral and written submissions. They were requested to give detailed write-up, Catalogue and composition of the products under present proceedings and whether they are of chemical origin or otherwise individually latest by 12.08.2018 without fail. The Jurisdictional Officer was not present but telephonically informed that their earlier submissions may be relied upon.
05. OBSERVATIONS
We have gone through the facts of the case and the submissions made by the applicant and the department. We find that –
1) “Applicant” is mainly engaged in trading of various poultry feed products. In the course of its business the products namely DL Methionine, bicarbonate, Phytase, Betaine, Monodicalcium, Tryptophan, UT Vit 50, Threonine, Lysine and Creamino are imported by the applicant. Applicant submits the said products are feed supplements for consumption as poultry feed only and are not capable of being used for any other use. As per the contention of the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
of goods mentioned in the entry – 102 and in particular poultry feed, cattle feed, supplement, concentrate and additives. We also find that other products covered by the said entry are self-explanatory and require no discussion. Further we find that the expression which are central point of discussion i.e. poultry feed, animal feed, supplement, concentrate and additives are not defined in the statute or in the notification issued under the Act. As such we may refer the Wikipedia or dictionary to understand these expressions:
Definition of feed – as per dictionary to furnish something essential to the development, sustenance, maintenance, or operation of reading feeds the mind
CAMBRIDGE DICTIONARY
to give food to a person, group, or animal
As per WIKIPEDIA
Animal feed
Animal feed is food given to domestic animals in the course of animal husbandry. There are two basic types: fodder and forage. Used alone, the word “feed” more often refers to fodder.
Fodder
“Fodder” refers particu
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ghages, depending on their composition. Concentrates are feeds that contain a high density of nutrients, usually low in crude fiber content (less than 18% of dry matter (DM)) and high in total digestible nutrients. Roughages are feeds with a low density of nutrients, with a crude fiber content over 18% of DM, including most fresh and dried forages and fodders.
Concentrates may be high in energy, referred to as energy concentrates, such as cereals and milling by-products, or high in protein, with over 20% crude protein, referred to as protein concentrates. Concentrates may be fed in raw or milled forms as individual feeds (sometimes referred to as straights), or may be blended or formulated into balanced rations for particular production purposes (compound
CONCENTRATE MEANING
MERRIAM WEBSTER DICTIONARY
a feedstuff (such as grains) relatively rich in digestible nutrients
ADDITIVES MEANING.
CAMBRIDGE ENGLISH DICTIONARY
a substance that is added to food in order to improve its taste
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
animal based upon the nature of husbandry such as meat, milk, egg etc.
Further we find that entry 102 of the exemption notification is not open ended. It cover those goods that are falling under chapter Heading 2301, 2302,2304,2305,2306,2308 and 2309 and which satisfy the description of goods as animal feed, supplement, concentrate and additives. These imported goods alone are eligible to avail the benefit of tax exemption under the GST ACT. It is therefore imperative to examine in detail chapter 23 of the CET –
We find that Chapter 23 is related to the “Residual and Waste from the food Industries prepared Animal fodder” and therefore goods classifiable under the tariff codes as stated above are only covered and eligible for exemption benefit under entry no. 102 of the exemption notification mentioned above. Thus the benefit under Entry No. 102 is restricted as above:-
We find that the details of tariff code (HSN) and its description as per tariff are as under:
Sr. No.of Not.If.
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
aceans, molluscs or other aquatic invertebrates :
Fish meal, unfit for human consumption:
23012011
–
In powder form
23012019
–
Other
23012090
Other
2302 BRAN, SHARPS AND OTHER RESIDUES, WHETHER OR NOT IN THE FORM OF PELLETS, DERIVED FROM THE SIFTING, MILLING OR OTHER WORKING OF CEREALS OR OF LEGUMINOU S PLANT
2302
BRAN, SHARPS AND OTHER RESIDUES, WHETHER OR NOT IN THE FORM OF PELLETS, DERIVED FROM THE SIFTING, MILLING OR OTHER WORKING OF CEREALS OR OF LEGUMINOUS PLANTS
230210
–
Of maize (corn) :
23021010
Maize bran
23021090
Other
23023000
–
Of wheat
23024000
–
Of other cereals
23025000
–
Of leguminous plants
2304
Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of soya bean oil
2305
Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
oil-cake meal, decorticated expeller variety
23061020
Oil-cake and oil-cake meal, decorticated, solvent extracted (defatted) variety
23061030
Oil-cake and oil-cake meal, undecorticated, expeller variety
23061040
Oil-cake and oil-cake meal, undecorticated, solvent extracted (defatted) variety
23061090
Other
230620
–
Of linseed :
23062010
Oil-cake and oil-cake meal, expeller variety
23062020
Oil-cake and oil-cake meal, solvent extracted (defatted) variety
23062090
Other
Further applicant as per instructions during the course of proceedings had made submission with respect to each of his products such as Name of supplier, origin, process under taken by the supplier and catalogue.
On the basis of above, it is evident from the description of animal feeds that only those products that merit classification in the corresponding to HSN code as per details above are eligible for exemption from payment of GST vide entry 102 of the exemption notification. On perusa
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
),PHOSPHONATES (PHOSPHITES) AND PHOSPHATES; POLYPHOSPHATE, WHETHER OR NOT CHEMICALLY DEFINED
2835
PHOSPHINATES (HYPOPHOSPHITES), PHOSPHONATES (PHOSPHITES) AND PHOSPHATES; POLYPHOSPHATES, WHETHER OR NOT CHEMICALLY DEFINED
283510
–
Phosphinates (hypophosphites) and Phosphonates (phosphites) :
28351010
Calcium hypophosphite
28351020
Magnesium hypophosphite
28351090
Other
–
Phosphates :
28352200
Of mono-or disodium
28352400
Of potassium
28352500
Calcium hydrogenorthophosphate (“dicalcium phosphate”)
283526
Other phosphates of calcium :
28352610
Calcium monobasic phosphate
28352620
Calcium tribasic phosphate
28352690
Other
283529
Other :
28352910
Magnesium phosphate, monobasic
28352920
Magnesium phosphate, dibasic
28352930
Magnesium phosphate, tribasic
28352940
Sodium hexametaphosphate
28352990
Other
–
Polyphosphates :
28353100
Sodium triphosphate (sodium tripoly-phosphate)
28353900
O
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nine(29304000), Sodium Bicarbonate (28363000), Betaine 29239000), Tryptophan (29224990), Threonine (29225090), Lysine HCL (29224100), Sodium Sulphate (28331990), Lysine sulphate (29224100) and Monocalcium Phosphate (28352610). These products are covered under schedule Ill and they would be liable to taxes @18 % IGST. However the product Di Calcium phosphate (2835 2610) would fall under Sr. no. 105 of notification no 2/2017-Integrated Tax (Rate) dated 28/06/2017.
06. In view of the extensive deliberations as held hereinabove, we pass an order as follows:
ORDER
(Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
NO.GST-ARA- 25/2018-19/B-88
Mumbai, dt. 14/08/2018
For reasons as discussed in the body of the order, the questions are answered thus –
Question: – Classification of our products under GST regime
Answer :- The products referred under application are not covered under entry 102 of the notifica
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =