GST Rates for Tobacco Leaf Processing Decided: Unprocessed at 5%, Processed at 28%

The judgment clarifies GST rates for tobacco leaf processing and trading. Unprocessed leaves are taxed at 5%, while processed leaves (threshed and re-dried) are taxed at 28%. Specific processes on the leaves determine the GST rate.

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Issues Involved:
1. GST rate on tobacco leaves procured from auction platforms or directly from farmers.
2. GST rate on tobacco leaves purchased from other dealers.
3. GST rate on graded tobacco leaves.
4. GST rate on butted tobacco leaves.
5. GST rate on re-dried tobacco leaves.
6. GST rate on threshed and re-dried tobacco leaves.
7. GST rate on threshed and re-dried tobacco leaves processed on a job work basis.

Detailed Analysis:

Issue 1: GST rate on tobacco leaves procured from auction platforms or directly from farmers
The applicant purchases cured and dried tobacco leaves from auction platforms or directly from farmers. The ruling states that the GST rate applicable on such tobacco leaves is 5% under the reverse charge mechanism as per Notification No. 4/2017-Central Tax (Rate).

Issue 2: GST rate on tobacco leaves purchased from other dealers
When the applicant purchases tobacco leaves from other dealers who have sourced them from farmers, the applicable GST rate is 5% (2.5% SGST + 2.5% CGST) according to Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate).

Issue 3: GST rate on graded tobacco leaves
The applicant grades the tobacco leaves based on various parameters such as size, color, and texture. The ruling determines that the GST rate on such graded tobacco leaves remains 5% (2.5% SGST + 2.5% CGST) as per Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate).

Issue 4: GST rate on butted tobacco leaves
If the applicant performs butting on the tobacco leaves and sells them, the GST rate applicable is 5% (2.5% SGST + 2.5% CGST) as per Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate).

Issue 5: GST rate on re-dried tobacco leaves
For tobacco leaves that are re-dried without threshing, the applicable GST rate is 5% (2.5% SGST + 2.5% CGST) as per Sl.No.109 of Schedule I Notification No.1/2017-Central Tax (Rate).

Issue 6: GST rate on threshed and re-dried tobacco leaves
When the applicant gets the tobacco leaves threshed and re-dried, the GST rate applicable is 28% (14% SGST + 14% CGST) as per Sl.No.13 of Schedule IV Notification No.1/2017-Central Tax (Rate).

Issue 7: GST rate on threshed and re-dried tobacco leaves processed on a job work basis
If the applicant gets the tobacco leaves threshed and re-dried on a job work basis at another's premises and then sells such processed leaves, the applicable GST rate is 28% (14% SGST + 14% CGST) as per Sl.No.13 of Schedule IV Notification No.1/2017-Central Tax (Rate).

Summary:
The judgment provides clarity on the GST rates applicable to various stages of tobacco leaf processing and trading. It distinguishes between the rates for unprocessed tobacco leaves, which are taxed at 5%, and processed tobacco leaves (threshed and re-dried), which are taxed at 28%. The ruling emphasizes the importance of the specific processes performed on the tobacco leaves in determining the applicable GST rate.

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