Product "Bio Processed Meal" not GST exempt under HS Code 23099090 per Authority ruling

The Authority ruled that the product "Preparation of a kind used in Animal Feeding - Bio Processed Meal" is not classified under HS Code 23099090 and thus not eligible for the GST exemption under Notification 02/2017-CT (Rate) dated 28.06.2017. The ruling stands unless invalidated under relevant provisions of the GST Act.

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Issues Involved:
1. Classification of the product "Preparation of a kind used in Animal Feeding - Bio Processed Meal."
2. Applicability of GST rate as per Notification 02/2017-CT (Rate) dated 28.06.2017.

Detailed Analysis:

Issue 1: Classification of the Product

7.1 The applicant, engaged in the manufacturing and export of various soya processed foods, sought confirmation of the classification of their product "Preparation of a kind used in Animal Feeding - Bio Processed Meal" under HS Code 23099090. The product is derived from soybean meal through a fermentation process involving bacteria/enzymes, resulting in changes such as reduced anti-nutritional factors and increased lactic acid.

7.2 The applicant argued that the product is meant exclusively for animal feed, highlighting its protein content and fermentation process that makes it unsuitable for human consumption. They cited Notification 02/2017-CT (Rate) dated 28.06.2017, claiming that their product falls under the exempted category for animal feed.

7.3 The applicant acknowledged a typographical error in their initial submission, correcting the protein content to "up to 52%," removing the statement "and not fit for human consumption."

7.4 The Authority noted that the applicant is a renowned manufacturer of various soya-based products for general public consumption, animal feed, and industrial use. A critical analysis was required to establish that the product is meant solely for animal feed.

7.5 The chapter note for heading 2309 includes products used in animal feeding obtained by processing vegetable or animal materials to such an extent that they lose the essential characteristics of the original material. The applicant claimed classification under HSN Code 23099090, which is meant for animal feed and attracts Nil rate of GST.

7.6 The Authority derived that the chapter heading 23099090 is exclusively for animal feed but noted the lack of evidence from the applicant to prove that the "Bio Processed Meal" is meant solely for animal feed.

7.7 The Authority emphasized the applicant's withdrawal of the statement "and not fit for human consumption," which further substantiated the lack of evidence supporting their claim.

7.8 Consequently, the Authority concluded that the applicant failed to provide sufficient evidence to support their claim that the product falls under chapter heading 23099090 and is therefore not entitled to the Nil rate of GST as per Notification 02/2017-CT (Rate) dated 28.06.2017.

Issue 2: Applicability of GST Rate

8. RULING The Authority ruled that the product "Preparation of a kind used in Animal Feeding - Bio Processed Meal" is not entitled to classify under HS Code 23099090 and therefore not entitled to the benefit of Notification No. 02/2017-CT (Rate) dated 28.06.2017 and the corresponding notification issued under the MPGST Act. This ruling is valid subject to the provisions under section 103(2) until and unless declared void under Section 104(1) of the GST Act.

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