AAAR confirms cattle feed products DWGS and DDGS attract 5% GST under heading 2303

The AAAR Telangana upheld the lower authority's decision regarding GST exemption on cattle feed products DWGS and DDGS. The appellate authority confirmed that these distillery residues are classifiable under heading 2303 and attract 5% GST as per Schedule I of notification 1/2017-Central Tax (Rate). The ruling was supported by Circular 163/19/2021-GST clarifying that brewers spent grain, DDGS and similar residues fall under this classification. The appeal was disposed of with the original order being maintained.

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Issues Involved:
1. Interpretation of GST taxability on the sale of distillery by-products as cattle feed.
2. Timeliness of filing an appeal against the Advance Ruling.
3. Consideration of end use in determining tax classification.
4. Legal validity of certificates and judgments cited in support of the appeal.
5. Applicability of Circular No. 163/19/2021-GST on the case.

Analysis:
1. The appeal concerns the taxability of distillery by-products, DWGS and DDGS, sold as cattle feed under GST. The lower authority classified these products under S.No. 104 of Notification No. 1/2017, taxable at 5%. The appellant argued for exemption under S.No. 102 of Notification No. 02/2017 based on end use. However, the Appellate Authority upheld the lower authority's classification, stating that specific entries override general ones, and end use alone cannot determine classification. The appellant's reliance on legal pronouncements and certificates was deemed unconvincing.

2. The appeal was filed within the prescribed time limit of 30 days from the communication of the Advance Ruling. The appellant received the order on 17.3.2022 and filed the appeal on 12.4.2022, meeting the deadline under Section 100(2) of the Act.

3. The Appellate Authority noted that the end use argument by the appellant was not tenable as the product's classification should be based on its origin as a by-product of distilling activities. The Circular No. 163/19/2021-GST clarified that products like DDGS are classified under heading 2303, attracting GST at 5%. The Authority upheld the lower authority's decision based on these considerations.

4. The certificates presented by the appellant to support their argument lacked legal sanctity and were rejected. Legal judgments cited were found to be distinguishable from the present case, weakening the appellant's position.

5. The Appellate Authority referenced Circular No. 163/19/2021-GST to clarify the classification and GST rates applicable to products like DDGS. The circular confirmed that such residues are classifiable under heading 2303, attracting GST at 5%. Based on this clarification, the lower authority's decision was upheld, and the appeal was disposed of accordingly.

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