2019 (9) TMI 742 - AAR - GST

Agriculture Mechanical Sprayer GST Classification: 12% Tax Rate Upheld

The ruling determined that the 'Agriculture Mechanical Sprayer' is classified under Chapter Head 8424 of the GST Tariff and should be taxed at 12% as per ... Classification of goods - Agriculture Knapsack Sprayer - whether classified under chapter sub heading No. 84248200 of the Custom/Excise Tariff Act or under entry 325 of Sch III or entry 195B of Sch II of Notification no. 1/2017 as amended? - rate of GST- Applicability of N/N. 01/2017-Central Tax (Rate) dtd. 28.06.2017 as amended vide N/N. 06/2018-CT(R) dtd.25.01.2018 and the corresponding notification issued under MPGST Act, 2017. HELD THAT:- The product in question is essentially a Mechanical Sprayer which can be carried on back and can be operated either by hand or through a battery. We find that there is no dispute to the classification of product, which even as per the own admission of the applicant would be under Chapter Head 8424 of the GST Tariff - even the applicable rate of GST is not disputed prior to 25.01.2018 as the product ‘Mechanical Sprayers” were subject to GST @ 18% as these were squarely covered under Sr.No.325 of the Notification no.01 2017-CT(R) dtd.28.06.2017 and the corresponding notification issued under MPGST Act. However, with effect from 25.01.2018. by dint of amending notification no.06/2018-CT9R) dtd.25.01.2018, and the corresponding notification issued under MPGST Act the item ‘Mechanical sprayers’ has been brought in the ambit of Schedule-II vide Sr.No.195B Thus, the question posed before us has relevance only for the period post 25.01.2018. Sr.No. 195B has been inserted into the Schedule-II vide Notification No.06/2018-CT(R) and the product under question Mechanical Sprayers is categorically mentioned there under. Thus, that hardly leaves any doubt that Mechanical Sprayers classifiable under Chapter head 8424 shall attract GST @12% with effect from 25.01.2018. Issues Involved:Classification of 'Agriculture Knapsack Sprayer' under HSN 8424 and applicable GST rate (12% or 18%).Analysis:1. Application and Provisions: The application filed under Section 97 of the Central Goods & Services Tax Act by an unregistered entity seeking clarification on the classification and GST rate for the product. The provisions of the CGST Act and MPGST Act are considered identical unless specified otherwise.2. Brief Facts and Questions Raised: The Applicant is involved in the import, trade, and manufacture of 'Agriculture Knapsack Sprayer.' The confusion arises regarding the correct classification under the GST tariff and the applicable tax rate, with most dealers charging 12% GST and some charging 18%. The questions raised before the Authority pertain to the correct classification and GST rate for the product.3. Concerned Officer's Viewpoint: The Concerned Officer opined that the product falls under Chapter Head 8424 of the GST Tariff and should attract GST at 12% post the amendment in the relevant notification.4. Record of Personal Hearing: The Applicant's representative reiterated that the product should be classified under HSN 8424 and taxed at 12%. They presented relevant extracts of notifications to support their argument, emphasizing the intention to support agriculture/irrigation systems.5. Discussions and Findings: The Authority admitted the application for consideration under Section 97(2)(a) to determine the classification and GST rate for the 'Agriculture Knapsack Sprayer.' After careful consideration of arguments and legal citations, it was established that the product is a Mechanical Sprayer falling under Chapter Head 8424 and should attract GST at 12% post the amendment in the notification.6. Ruling: The final ruling declared that the 'Agriculture Mechanical Sprayer' falls under Chapter Head 8424 of the GST Tariff and should be taxed at 12% as per the relevant notifications issued post the amendment. The ruling is valid unless declared void under the provisions of the GST Act.This detailed analysis covers the classification and applicable GST rate determination for the 'Agriculture Knapsack Sprayer' based on the submissions, arguments, and findings presented before the Authority.