2022 (9) TMI 1046 - HC - GST

Mango Pulp Tax Dispute Settled: GST Rate Reduced from 18% to 12% Based on Clarificatory Circular

HC resolved GST classification dispute for mango pulp, determining the applicable rate at 12% instead of 18%. The court relied on a government circular ... Classification under Tariff Item 0804 50 40 - GST rate on mango pulp - distinction between fresh, sliced and dried, and other forms of mangoes under heading 0804 - effect of GST Council recommendation and administrative clarification - interpretation of Notification No.1/2017-Central Tax (Rate) and subsequent amendmentClassification under Tariff Item 0804 50 40 - GST rate on mango pulp - effect of GST Council recommendation and administrative clarification - Authorities were not justified in charging GST at 18% on Mango pulp; the correct rate is 12%. - HELD THAT: - The Authority for Advance Ruling had held mango pulp/puree taxable at 18% and the Appellate Authority modified that order to classify the product under Tariff Item 0804 50 40 and charge GST at 18%. Subsequently, the Department of Revenue issued a Circular dated 03.08.2022, recording the GST Council's recommendation that mangoes under CTH 0804 (including mango pulp, other than fresh mangoes and sliced, dried mangoes) attract GST at 12%, while mangoes sliced and dried were reduced to 5%. The Court accepted this administrative clarification and the Council's recommendation as determinative for classification and applicable rate, concluding that mango pulp falls within the category of other forms of dried mango under heading 0804 and was always meant to attract GST at 12%. Consequently, the appellate order imposing 18% is incorrect and the petitioner is liable to pay GST on mango pulp at 12%. [Paras 7, 8]Appellate Authority's order charging 18% is set aside insofar as it relates to mango pulp; mango pulp is liable to GST at 12%.Final Conclusion: Writ petition disposed of by holding that mango pulp is classifiable under heading 0804 and attracts GST at 12%; the order imposing GST at 18% is incorrect; no order as to costs. Issues involved:1. Classification of goods for GST2. Applicability of GST rate on mango pulpAnalysis:1. The petitioner filed a writ petition seeking a Writ of Mandamus directing the authorities to classify the goods manufactured by the petitioner under Chapter Heading 0804 50 40 and exempt from GST as per a specific notification. The court had earlier directed the authorities not to take coercive steps for GST recovery for past transactions and had directed the petitioner to pay GST for future transactions. The main issue was whether GST should be charged on 'Mango Pulp' at 18%.2. The petitioner had approached the Authority For Advance Ruling, where it was held that 'Mango pulp/puree' falls under a specific entry, attracting GST at 18%. The petitioner appealed this decision, and the Appellate Authority for Advance Ruling modified the order, confirming that 'Mango Pulp/Puree' is classifiable under a different tariff item and chargeable to GST at 18%. However, a circular issued by the Government of India clarified that mango pulp falls under a category attracting GST at 12%. Based on this clarification, the court held that the petitioner is liable to pay GST on Mango pulp at 12%, not 18%.3. The court noted the recommendation of the GST Council, which reduced the GST rate on certain forms of mangoes, including sliced and dried mangoes, to 5%. However, it was clarified that all other forms of dried mangoes, including mango pulp, attract GST at the rate of 12%. Therefore, the court concluded that the petitioner should pay GST on Mango pulp at 12%, as per the clarification provided by the Government circular. The orders imposing GST at 18% were deemed incorrect, and the petitioner was directed to pay GST at the revised rate of 12%.4. Consequently, the writ petition was disposed of, with no order as to costs. Any pending miscellaneous petitions in the case were to be closed as well. The judgment clarified the correct GST rate applicable to mango pulp based on the specific classification and notification, resolving the dispute in favor of the revised GST rate of 12% as clarified by the Government circular.