Mango pulp supplied to Export Oriented Unit attracts 12% GST rate, not 5% or 18% as claimed by parties

Gujarat HC held that mango pulp supplied to 100% Export Oriented Unit attracts 12% GST rate from July 1, 2017, not 5% as claimed by petitioner or 18% under residuary entry as claimed by respondents. Court ruled that Notification No. 6/2022 and circular dated August 3, 2022 were clarificatory, not retrospective amendments. GST Council's 47th meeting clarified that only mangoes sliced and dried attract 5% rate, while mango pulp falls under "mangoes other than sliced, dried" category attracting 12% rate under Entry No. 16. Show cause notice was quashed. Petition allowed in part.

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Issues Involved:
1. Classification and applicable GST rate for "mango pulp".
2. Validity and retrospective application of GST notifications and circulars.
3. Interpretation of HSN codes and GST tariff notifications.

Summary:

1. Classification and Applicable GST Rate for "Mango Pulp":
The petitioners supplied "mango pulp" to a 100% Export Oriented Unit. They paid GST at 5% based on their interpretation that "mango pulp" falls under the category of "mangoes sliced, dried" (Entry 30A of Schedule I, Notification No. 34/2017). The CBIC Helpdesk also confirmed this rate. However, the respondents argued that "mango pulp" was not specifically classified and thus fell under the residuary entry attracting 18% GST. The court concluded that "mango pulp" falls under a third category of mangoes (other than fresh and dried) and is subject to 12% GST as clarified by the GST Council in its 47th meeting and Notification No. 6/2022.

2. Validity and Retrospective Application of GST Notifications and Circulars:
The petitioners contended that the circular dated 3rd August 2022 and Notification No. 6/2022, which clarified the GST rate for "mango pulp" at 12%, could not be applied retrospectively. The court held that these were clarificatory in nature and did not retrospectively amend the tax rate. The court referenced several Supreme Court decisions, emphasizing that substantive legislative changes cannot be retrospective unless expressly provided.

3. Interpretation of HSN Codes and GST Tariff Notifications:
The court analyzed the relevant HSN codes and GST notifications. It noted that HSN 0804 includes mangoes, fresh or dried, and that "mango pulp" did not fit neatly into either category. The court agreed with the respondents that the GST tariff is based on HSN codes, which must be interpreted alongside the Customs Tariff Act. The court concluded that "mango pulp" falls under the third category of mangoes, attracting 12% GST, as clarified in the 47th GST Council meeting and subsequent notifications.

Conclusion:
The court quashed the impugned show cause notice and ruled that the petitioners are liable to pay GST at 12% on "mango pulp" from 1st July 2017 to 18th July 2022, rejecting the claims for 5% or 18% GST. The court emphasized that the clarifications provided by the GST Council and subsequent notifications were not retrospective amendments but clarifications of existing tax rates.

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