Appellate authority confirms GST classification for "Shatamrut Chyavan" as per Heading 2309.

The appellate authority upheld the Maharashtra Authority for Advance Ruling's decision, confirming the classification of "Shatamrut Chyavan" under Heading 2309, attracting a 'NIL' rate of GST. The appeal challenging this classification was dismissed, and the question of whether the product could be classified under Heading 2303 as "waste of sugar manufacture" was deemed outside the scope of the Advance Ruling provisions.

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Issues Involved:

1. Classification of the product "Shatamrut Chyavan" under TSH 2309 90 10.
2. Whether the product can be classified under Heading 2303 as "waste of sugar manufacture."

Detailed Analysis:

Issue I: Classification of the Product under TSH 2309 90 10

The Appellant, engaged in manufacturing and marketing "Shatamrut Chyavan," classified the product under Heading 2309 of the Customs Tariff Act, 1975, availing exemption from GST as per Sl. No. 102 of Notification No. 2/2017-C.T. (Rate), dated 28.06.2017. The product is marketed as a compounded animal feed that enhances milk production and immunity in cattle.

The Maharashtra Authority for Advance Ruling (MAAR) confirmed this classification, stating that the product falls under chapter heading 2309, attracting 'NIL' rate as per the aforementioned notification.

The Appellant argued that the product should be classified under Heading 2303, which attracts a 5% GST rate, citing that the primary ingredient is molasses, a by-product of sugar manufacturing.

Upon review, the appellate authority upheld the classification under Heading 2309. The product's ingredients, including molasses and various ayurvedic plants, justify its classification as compounded animal feed. The product is advertised and marketed specifically for cattle feed, enhancing milk production and immunity, thus fitting the description under Heading 2309.

The authority referenced the Explanatory Notes to the HSN and CBIC Circular No. 80/54/2018-GST, which clarify that molasses combined with other feeds fall under Heading 2309. The product is not capable of any general use and is specifically known in the market as a cattle feed supplement.

Issue II: Classification under Heading 2303

The Appellant's second question was whether the product could be classified under Heading 2303 as "waste of sugar manufacture." The MAAR dismissed this question, stating it does not relate to the supply of goods or services by the Appellant and falls outside the ambit of Section 97(2) of the CGST Act, 2017.

The appellate authority agreed, noting that molasses, a significant component of the product, is classified under Heading 1703, not 2303. The product, being a compounded animal feed, does not fit the description of "waste of sugar manufacture."

The authority reiterated that the question does not fall within the purview of Section 97(2) of the CGST Act, 2017, and thus, the MAAR's decision to not answer this question was appropriate.

Conclusion:

The appellate authority upheld the MAAR's ruling, confirming the classification of "Shatamrut Chyavan" under Heading 2309, attracting a 'NIL' rate of GST. The appeal filed by the Appellant was dismissed, and the second question regarding classification under Heading 2303 was deemed outside the scope of the Advance Ruling provisions.

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