Phosphate solubilizing fungal bio fertilizers classified under HSN 3103 90 00 attract 5% GST rate

AAR Karnataka classified phosphate solubilizing fungal bio fertilizers under HSN code 3103 90 00 as "other phosphatic fertilizers" rather than 3101 0099. The Authority determined that since the product contains rock phosphate, it is phosphatic in nature and not a superphosphate, warranting classification under heading 3103 90 00. Consequently, the product attracts GST at 5% under Schedule I, Sl.No. 182B of Notification No. 1/2017-Central Tax (Rate), which covers mineral or chemical fertilizers, phosphatic, other than those clearly not for use as fertilizers.

---

---

Issues Involved:
1. Classification of the product "Bio-Phosphate" under the appropriate HSN code.
2. Applicable GST rate for the product "Bio-Phosphate".

Summary:

Admissibility of the Application:
The application was deemed admissible under Section 97(2)(a) of the CGST Act 2017, as it pertains to the "classification of goods."

Brief Facts of the Case:
The applicant, a manufacturer of Agro inputs, sought an advance ruling on the classification and GST rate for their new product "Bio-Phosphate," a Phosphate Solubilizing Fungal Biofertilizer. The product is registered under the FCO (Fertilizers Control Order 1985) and contains Rock Phosphate blended with Phosphate Solubilizing Fungal and Bacterial cultures.

Applicant's Interpretation of Law:
The applicant contended that their product should be classified under HSN code 3101 0099, attracting GST at 5%.

Authority's Findings & Discussion:
1. Classification of Bio-Phosphate:
- The product is manufactured by blending Rock Phosphate with Phosphate Solubilizing Fungal and Bacterial cultures, supplemented with essential mineral nutrients.
- The applicant's claim for classification under HSN code 3101 0099 was rejected as the product is neither animal nor vegetable-based fertilizer.
- The Deputy Commissioner suggested classification under HSN code 3102 90 90, but this was also rejected as the product does not contain nitrogen or nitrogen compounds.
- The product was found to be phosphatic in nature and thus classified under heading 3103 90 00, which covers other phosphatic fertilizers.

2. Applicable GST Rate:
- As per Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, the product falls under Sl.No.182B of Schedule I, attracting a GST rate of 5%.

Ruling:
The product "Bio-Phosphate" merits classification under HSN code 3103 90 00 and is subject to GST at 5%, in terms of Sl.No. 182B of Schedule I to the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended.

---