GST Rates on Tobacco Leaves Clarified: 5% for Farmer-Cured, 28% for Processed

The case involved determining the GST rates on various types of tobacco leaves and their processing stages. The court ruled that tobacco leaves procured directly from farmers or auction platforms and cured by farmers themselves attract a 5% GST rate under the reverse charge mechanism. However, threshed and re-dried tobacco leaves, whether done by the applicant or on a job work basis, are subject to a higher 28% GST rate. Other scenarios such as graded, butted, re-dried, bundled, and stripped tobacco leaves also have specific GST rates ranging from 5% to 28%.

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Issues Involved:

1. Rate of GST on tobacco leaves procured from auction platforms or directly from farmers.
2. Rate of GST on tobacco leaves purchased from other dealers.
3. Rate of GST on graded tobacco leaves.
4. Rate of GST on butted tobacco leaves.
5. Rate of GST on re-dried tobacco leaves.
6. Rate of GST on threshed and re-dried tobacco leaves.
7. Rate of GST on threshed and re-dried tobacco leaves on job work basis.
8. Rate of GST on bundled tobacco leaves.
9. Rate of GST on stripped tobacco leaves.

Detailed Analysis:

1. Rate of GST on Tobacco Leaves Procured from Auction Platforms or Directly from Farmers:
The GST rate applicable on tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves, is 5% under the reverse charge mechanism as per Notification No. 4/2017-Central Tax (Rate).

2. Rate of GST on Tobacco Leaves Purchased from Other Dealers:
The applicable rate of GST if the applicant purchases tobacco leaves from other dealers who have purchased them from farmers for the purpose of trading is 5% (2.5% SGST + 2.5% CGST) as per Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

3. Rate of GST on Graded Tobacco Leaves:
The GST rate applicable if the applicant segregates the tobacco into grades depending upon their size, color, shade, length, texture of the leaf, etc., and sells such graded tobacco leaf is 5% (2.5% SGST + 2.5% CGST) as per Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

4. Rate of GST on Butted Tobacco Leaves:
The applicable rate of GST if the tobacco leaves are butted and sold to other dealers is 5% (2.5% SGST + 2.5% CGST) as per Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

5. Rate of GST on Re-dried Tobacco Leaves:
The GST rate applicable if the applicant gets the tobacco leaves re-dried without getting them threshed is 5% (2.5% SGST + 2.5% CGST) as per Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

6. Rate of GST on Threshed and Re-dried Tobacco Leaves:
The applicable rate of tax if the applicant gets the tobacco leaves threshed and re-dried is 28% (14% SGST + 14% CGST) as per Sl.No.13 of Schedule IV Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

7. Rate of GST on Threshed and Re-dried Tobacco Leaves on Job Work Basis:
The GST rate applicable if the applicant gets the tobacco threshed and re-dried on a job work basis at others' premises and then sells such threshed and re-dried tobacco leaves to others is 28% (14% SGST + 14% CGST) as per Sl.No.13 of Schedule IV Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

8. Rate of GST on Bundled Tobacco Leaves:
Whether bundled or sold separately, tobacco leaves attract a GST rate of 5% (2.5% SGST + 2.5% CGST) as per Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

9. Rate of GST on Stripped Tobacco Leaves:
The applicable rate of tax if the applicant gets the service of stripping of tobacco leaves by the service providers without getting them threshed and sells such stripped tobacco leaves to others is 28% (14% SGST + 14% CGST) as per Sl.No.13 of Schedule IV Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

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