Distillery By-Products DWGS and DDGS Used as Cattle Feed Taxable at 5% GST, Not Exempt

The AAR ruled that Distillery Wet Grain Soluble (DWGS) and Distillery Dry Grain Soluble (DDGS), by-products of a distillery used as cattle feed, do not qualify for GST exemption under Sl. No. 102 of Notification No. 02/2017. Despite the applicant's argument based on end-use as cattle feed, the AAR determined these products are properly classified as brewing/distillery waste taxable at 5% under Sl. No. 104 of Notification No. 01/2017. The application under Section 97(1) of TGST Act was accordingly decided against the exemption claim.

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Issues:
1. Application filed under Section 97(1) of TGST Act, 2017 for Advance Ruling.
2. Classification of Distillery Wet Grain Soluble (DWGS) and Distillery Dry Grain Soluble (DDGS) as cattle feed for GST exemption.

Analysis:
1. The applicant, a distillery, sought clarification on the tax exemption status of their by-products, DWGS and DDGS, which are used as cattle feed. The application was admitted after payment of the requisite fee and with no objections from the jurisdictional officer.

2. The main contention revolved around whether the products qualified for exemption under serial no 102 of Notification No. 02/2017. The applicant argued that DWGS and DDGS were solely used as cattle feed and should be exempt from GST. They relied on the end-user test for their claim.

3. During the personal hearing, the authorized representatives reiterated the products' usage as cattle feed and emphasized their eligibility for exemption under Sl. No. 102 of Notification No. 02/2017. They requested the AAR to decide based on their detailed submissions.

4. The AAR's discussion focused on the classification of the products under the relevant notifications. It was noted that while brewing or distillery waste was taxed at 5% under S. No. 104 of Notification No. 01/2017, the products in question did not fall under the exemption category of S. No. 102 of Notification No. 02/2017.

5. The ruling clarified that DWGS and DDGS were not covered under the exemption of Notification No. 02/2017 but were taxable at 5% under S. No. 104 of Notification No. 01/2017. Therefore, the sale of these products as cattle feed did not qualify for GST exemption.

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