2018 (12) TMI 141 - AAR - GST

Ruling on Poultry Feed Products' GST Classification and IGST Rate

The authority ruled that various poultry feed products, including DL Methionine, Sodium Bicarbonate, Betaine, Tryptophan, Threonine, Lysine HCL, Sodium ... Classification under GST - Exemption notification interpretation - Animal feed, supplement, concentrate and additives - HSN-based classification - Chapter 23 vs Chapters 28 and 29 - Scope of Entry No. 102 and Entry No. 105 of Notification No. 2/2017Classification under GST - Animal feed, supplement, concentrate and additives - HSN-based classification - Scope of Entry No. 102 of Notification No. 2/2017 - Whether the products imported and traded by the applicant fall within Entry No. 102 (chapter 23 headings) of Notification No. 2/2017 and are therefore exempt from GST - HELD THAT: - The Authority examined the description in Entry No. 102 which limits the exemption to goods falling under specified chapter/headings of chapter 23 and satisfying the descriptions 'aquatic feed..., poultry feed & cattle feed, ... supplement & ... concentrates & additives'. The terms 'poultry feed', 'supplement', 'concentrate' and 'additives' are not defined in the statute; the Authority accepted ordinary dictionary and accepted industry descriptions to conclude that the entry is not open ended and applies only to goods classifiable under the listed chapter/headings of chapter 23. The Authority compared the applicant's product descriptions and supplier/import documentation with the tariff chapter/heading structure and found most of the listed products to be classifiable under chapters 28 and 29 (organic and inorganic chemicals) rather than under chapter 23. The Authority rejected the contention that labelling as 'not for human/medicinal use' or certificates alone could reclassify chemically described commodities into chapter 23. Consequently, products that are classifiable under other specified tariff headings (such as those in chapters 28 and 29) do not fall within Entry No. 102 and are not eligible for the exemption thereunder.The products referred to in the application, except as specifically noted, do not fall under Entry No. 102 of Notification No. 2/2017 and are not exempt under that entry.HSN-based classification - Scope of Entry No. 105 of Notification No. 2/2017 - Chapter 23 vs Chapters 28 and 29 - Whether any of the applicant's products qualify for exemption under some other specific entry of Notification No. 2/2017 - HELD THAT: - The Authority examined the tariff headings and the specific entries in Notification No. 2/2017. It found that Di calcium phosphate (DCP) of animal feed grade conforming to the relevant IS specification is covered by the exemption at Entry No. 105 under HSN 2835. The applicant's mono calcium phosphate (MCP) / mono di calcium phosphate products were considered and found not to fall within the limited scope of Entry No. 105 which refers specifically to DCP of animal feed grade. For other listed items (DL Methionine, sodium bicarbonate, betaine, tryptophan, threonine, lysine, sodium sulphate, lysine sulphate, etc.) the Authority concluded they are classifiable under headings in chapters 28/29 (organic/inorganic chemicals) and thus are not covered by the exemption notifications applicable to chapter 23; accordingly these items attract tax as per the tariff applicable to their HSN headings.Di calcium phosphate (animal feed grade) is covered by Entry No. 105 of Notification No. 2/2017; the remaining products are not covered by the exemption entries and are classifiable under other HSN headings (primarily chapters 28 and 29) and taxable accordingly.Final Conclusion: The Advance Ruling holds that, except for Di calcium phosphate of animal feed grade which is covered by Entry No. 105 of Notification No. 2/2017, the products referred to in the application do not fall within Entry No. 102 (chapter 23) and are classifiable under other HSN headings (principally chapters 28 and 29) and are therefore not exempt under Notification No. 2/2017 and are taxable as per their respective HSN classifications. Issues Involved:1. Classification of products under the GST regime.Issue-wise Detailed Analysis:1. Classification of Products under GST Regime:The applicant, Uttara Impex Private Limited, is engaged in trading various poultry feed products and sought an advance ruling on their classification under the GST regime. The products in question include DL Methionine, Bicarbonate, Phytase, Betaine, Monodicalcium, Tryptophan, UT Vit 50, Threonine, Lysine, and Creamino. The applicant contends that these products should be classified under HSN codes 2301, 2302, 2308, and 2309, which would render them exempt from GST as per Notification No. 2/2017-Integrated Tax (Rate).Applicant's Interpretation:The applicant argued that the products are feed supplements for poultry and should be classified under the aforementioned HSN codes, making them exempt from GST. They cited various judgments and expert opinions to support their claim that the products are indeed animal feed supplements. The applicant also provided import documents and certificates from different companies asserting that these products are not for human consumption but for animal feed.Jurisdictional Officer's View:The jurisdictional officer contended that the products do not fall under the HSN codes mentioned by the applicant. Instead, the officer classified the products under different HSN codes, such as 29304000 for DL Methionine and 30049032 for Bicarbonate, which attract a GST rate of 12%. The officer argued that these products are not included under the category of poultry feed as per the GST notification.Hearing and Observations:During the hearings, the applicant reiterated their stance, providing detailed descriptions, catalogues, and compositions of the products. The authority examined the definitions of terms like 'feed,' 'supplement,' 'concentrate,' and 'additive' from various dictionaries and encyclopedias. They concluded that the products in question are not covered under the entry 102 of the exemption notification but fall under different chapters of the Customs Tariff Act.Ruling:The authority ruled that the products DL Methionine (29304000), Sodium Bicarbonate (28363000), Betaine (29239000), Tryptophan (29224990), Threonine (29225090), Lysine HCL (29224100), Sodium Sulphate (28331990), Lysine Sulphate (29224100), and Monocalcium Phosphate (28352610) are covered under Schedule III and liable to tax at 18% IGST. However, Di Calcium Phosphate (28352610) of animal feed grade is covered under Entry No. 105 of Notification No. 02/2017-(Integrated Tax) (Rate) and is exempt from GST.Order:The products referred to in the application, except Di Calcium Phosphate (28352610) of animal feed grade, are not covered under entry 102 of Notification No. 2/2017-Integrated Tax (Rate) dated 28th June 2017. The rest of the products fall under Schedule III and are liable to tax at 18% IGST.