In Re : G.N. Chemicals
GST
2018 (12) TMI 142 – AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – 2018 (18) G. S. T. L. 825 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – AAR
Dated:- 5-9-2018
STC\/AAR\/04\/2018
GST
Shri S.K. Buxy and Rajesh Kumar Singh, Members
\nORDER
\nProceedings : The applicant M\/s G.N. Chemicals, 27\/13, Nehru Nagar-West, Bhilai, (C.G.) GSTIN 22AAFFG5162J1ZJ has filed the application U\/s 97 of the Chhattisgarh Goods & Services Tax Act, 2017 requesting advance ruling as regards levy of GST Rate applicable in case of “Neem Seed”, classified under HSN Code 1211, placed both under 0% GST Rate and 5% CST Rate, on the condition that “All goods of seed quality” are classifiable under 0% GST Rate, whereas “All goods other than Seed quality” shall be classified under 5% GST Rate. The applicant is of the opinion that Neem Seed is classifiable under 0% GST Rate.
\n2. Facts of the case :-
\nI. M\/s G.N. Chemicals, 27\/13, Nehru Nagar-West, Bhilai,<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ommodities for Customs and Central Excise, and now for GST classification as well. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n sowing, they would have placed Neem seed in HSN code 1209 (which is placed in Nil Rate classification), however, they have placed neem seed in HSN Code 1211 – the Heading title of which explicitly confirms the application of seeds to be not just for sowing purpose. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he applicable general interpretational rules have been humbly submitted. Therefore it was their contention that Neem Seed (in all forms) to be classified under 0% GST Tax slab. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Ayurveda practitioners to be anthelmintic, antifungal, antidiabetic, antibacterial, anti viral, contraceptive and sedative. Neem is a key ingredient in Non-Pesticidal Management (NPM), providing a natural alternative to synthetic pesticides. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ative term and means the degree of excellence when compared to an acceptable standard. The seeds having required standards of purity, germination and other attributes are referred to as quality seeds- Thus this chapter itself makes a very wide distinction at the outset between seeds per se and seed quality at the outset. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n wing) includes all types of Neem Seed, whether for sowing or other uses and should be approved under tax free category. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on 5 to Section 9 clearly stipulate the provisions for authentication of seed quality on the basis of which any seed would be defined as 'tax free seed for sowing.' = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n etch of imagination be categorized as those attracting tax @ 0%. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re : G.N. ChemicalsGST2018 (12) TMI 142 – AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – 2018 (18) G. S. T. L. 825 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – AARDated:- 5-9-2018STC\/AAR\/04\/2018 GSTShri S.K. Buxy and Rajesh Kumar Singh, Members ORDER Proceedings : The applicant M\/s G.N. Chemicals, 27\/13, Nehru Nagar-West, … Continue reading “In Re : G.N. Chemicals”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15317","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15317"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15317\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nNeem Seed is categorized under HSN Code 12119014 under Indian Trade Classification (HS) – 2017.
\nDescription of the Chapter 12 of ITC – HS Code reads as below : –
\n“OIL SEEDS AND OLEAGINOUS FRUITS; MISCELLANEOUS GRAINS, SEEDS AND FRLIIT; INDUSTRIAL OR MEDICINAL PLANTS; STRAW AND FODDER”
\n(iii) that, on carefully reading the Chapter description the apt placement of semi-colons and commas amply explains the types of goods & application of such goods covered by this classification under chapter 12 and the same is as below :-
\nType
\nMeaning
\nOil Seed
\nSeed that yields Oil
\nOleaginous Fruit
\nOily, or Rich in Oil, or Covered with Oil, or Producing Oil
\nAn oleaginous fruit is the part of a plant that is used to produce oil. It can be a fruit (for example olives), seed (for example sesame) or nut (for example walnuts)
\nGrains
\nGrain is a cereal crop that has been harvested and is used for food.
\nSeed
\nthe<\/p>\n
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\n(vi) thus, Neem Seed is to be classified under 12119014 irrespective of whether Neem Seed is used for sowing or for Industrial of medicinal purpose.
\n(vii) Now HSN Code 1211 is placed under Nil GST Rate category as well as 5% GST Rate category with the distinction as below :-
\nChapter 12
\n All goods of Seed quality
\nAll goods other than seed quality
\nNeem Seed
\n1211
\n1211
\n CST Rate
\n0%
\n5%
\n“The titles of section and chapter are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the heading and any relative section or chapter notes and, provided such heading or notes do not otherwise require, according to the provisions hereinafter contained.&#<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n5. Thus we find that M\/s. G.N. Chemicals, 27\/13 Nehru Nagar West, Bhilai, (C.G,) 490020, GSTIN 22AAFFG5162J1ZJ, the applicant is seeking clarity as regards the applicable rates for payment of GST on the aforesaid commodity that is Neem Seed, viz. whether the applicable rates should be @ 0% or 5%.
\n6. The legal position, Analysis and Discussion :-
\n6.1 The provisions for implementing the CGST Act and CGGST Act, 2017 are similar. Now we sequentially discuss the provisions that are applicable in the present case.
\n6.2 The following facts have been mentioned in the report received from the jurisdictional Office of the applicant i.e. O\/o Assistant Commissioner, Circle-2 Durg, with regard to the advance ruling application filed by the applicant :-
\nThis report is with reference to the applicat<\/p>\n
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\nIt goes beyond doubt that Neem is widely used in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose. Therefore it falls in HSN Code 1211 which contains “Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery in pharmacy or for insecticidal, fungicidal or similar purpose, frozen or dried, whether or not cut, crushed or powdered” and the rate of tax on items falling under this heading is 5% that is 2.5% CGST 2.5% SGST.
\nHowever, there are two entries in HSN code 1211, one is of 0% GST and another is of 5% GST. Both of these entries are extracted here for the sake of making matter more clear. These are as follows :
\n HSN
\nDESCRIPTION
\n RATE OF TAX
\n 1211
\nPlants and parts of plants (<\/p>\n
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\nThe applicant's other queries are about rate of tax on organic manure made up of Neem cannot be answered here due to lack of disclosure of procedure involved in making of manure. Unless it is determined that the manure made by the applicant is organic, it's needless to give opinion on it.
\n 6.3 To sum up in the opinion of jurisdictional officer following would be the answer of the applicant's queries :-
\n(i) Trading of Neem Seed in “fresh or chilled” form would attract 0% of GST, whereas when traded as “frozen or dried” form would attract 5% GST.
\n(ii) Trading of Neem Seed powder would also attract 5% of GST.
\n(iii) Neem oil ex<\/p>\n
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\n6.6 The applicant has not come up with any evidence or logical explanation to substantiate their above contention. It has been unambiguously clarified in each entry mentioned in the schedules, issued under State and Central GST Acts as regard the applicable tax rate on any goods\/ service along with the conditions and circumstances under which such goods\/service shall be classified as tax free or taxable under specific tax slab. The following two pre-conditions need fulfillment for categorizing the neem seed so supplied by the applicant as tax free, as stipulated under HSN code 1211 –
\n HSN
\nDESCRIPTION
\nRATE OF TAX
\n 1211
\nPlants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, frozen or dried, whether or not cut, crushed or powdered.
\nCGST 2.5%
\n SGST 2.5%\n <\/p>\n
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\n6.8 Seeds are the foundation of agriculture. Seed quality plays an important role in the production of agronomic and horticultural crops. Characteristics such as trueness to variety, germination percentage, purity, vigour, and appearance are important to farmers planting crops. Seed quality is the degree of excellence in regard to the characteristics referred to above that determines the seed quality. If the seed lot possesses high genetic purity and high germination percentage and is inter alia free from diseases, it is categorized as possessing high quality. Generally the standards fixed for certified seeds are considered of having quality standards. It implies that if a seed lot meets the certification standards, it is a good quality seed and if does not meet the certification standards, it is obviously not of s<\/p>\n
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\n6.10 The applicant during the course of hearing stated that they would make neem oil from the kernel of neem which they would acquire from the collection of dry neem fruits or purchase of the same and they would also sell organic manure made from the De-Oiled Cake and husk of Neem. This clearly goes on to establish that the said goods to be supplied by the applicant does not fulfill the conditions mentioned under HSN code 1209 and 1211 neither in the 'specific form' nor 'specific use', as stipulated under GST Act to be categorized as attracting tax @ 0%.
\n7. In view of the deliberations and discussions as above, we pass the following order :-
\nORDER
\n8. The ruling so sought by the Applicant is accordingly answered as under :-
\nIn terms of Notification No. 1\/2017-State Tax (Rate) No. F-10-43\/2017\/CT\/V(69), Naya Raipur, Dated 28-6-2017, Serial No. 73, Chapter 1211 :
\n (i) Supply of neem seeds in froze<\/p>\n
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