Micronutrient preparations classifiable under heading 3824, with GST applying under the micronutrient entry

Zn EDTA and Fe EDTA were held not to fall under Chapter Heading 3105 because that heading covers fertilisers with nitrogen, phosphorus or potassium as an essential constituent, which these micronutrient preparations did not satisfy. Their essential character was treated as micronutrient chemical preparations classifiable under Tariff Item 3824 99 90. On GST classification, the entry for goods under heading 3105 did not apply, while the schedule entry for micronutrients manufactured by a registered manufacturer was held applicable, attracting GST at 12%. The ruling on classification and tax rate was affirmed.

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Issues: (i) Whether Zn EDTA and Fe EDTA are classifiable under Chapter Heading 3105 as other fertilisers or under Tariff Item 3824 99 90 as chemical products not elsewhere specified or included; (ii) Whether the said products are covered under Sr. No. 182D of Schedule-I or Sr. No. 56 of Schedule-II of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.

Issue (i): Whether Zn EDTA and Fe EDTA are classifiable under Chapter Heading 3105 as other fertilisers or under Tariff Item 3824 99 90 as chemical products not elsewhere specified or included

Analysis: Heading 3105 applies only to products of a kind used as fertilisers containing, as an essential constituent, at least one of the fertilising elements nitrogen, phosphorus or potassium. The products in question are micronutrient preparations under the Fertilizer Control Order and their specifications show zinc in Zn EDTA and iron in Fe EDTA as the essential constituents, while nitrogen is not shown as an essential constituent. The Chapter 31 explanatory note excludes micronutrient preparations that may contain small amounts of fertilising elements but not as essential constituents. On this basis, the products do not satisfy Chapter Note 6 of Chapter 31 and do not fall within heading 3105. Their essential character is that of micronutrient chemical preparations, attracting heading 3824.

Conclusion: The products are not classifiable under Chapter Heading 3105 and are classifiable under Tariff Item 3824 99 90.

Issue (ii): Whether the said products are covered under Sr. No. 182D of Schedule-I or Sr. No. 56 of Schedule-II of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017

Analysis: Sr. No. 182D applies to goods classifiable under heading 3105. Since the products are not classifiable under heading 3105, that entry does not apply. Sr. No. 56 of Schedule-II covers micronutrients falling under serial no. 1(g) of Schedule I, Part A of the Fertilizer (Control) Order, 1985, manufactured by a registered manufacturer. The products are micronutrients covered by that schedule entry, and the appellant is registered under the Fertilizer Control Order. Therefore, the applicable GST entry is Schedule II.

Conclusion: The products are covered under Sr. No. 56 of Schedule-II and attract GST at 12%.

Final Conclusion: The appeal fails on classification and tax rate, and the ruling that the goods fall under heading 3824 with GST at 12% is affirmed.

Ratio Decidendi: Micronutrient preparations are excluded from heading 3105 unless nitrogen, phosphorus or potassium is an essential constituent; where the essential character is micronutrient-based, classification falls under heading 3824 and the corresponding GST entry for micronutrients applies.

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