GST rate on cattle feed 2302

[husen kadwalwala]

Dear sir,

we are manufacture of makka poha made out of maize. we have by product of the process which we clear as cattle feed. makka poha are cleared with GST rate of 5% and cattle feed with GST 0% . cattle feed is sold to farmers which they directly use for cattles.and we also supplied cattle feed in the past to some industries also( between 2017-20) with gst 0% and in some cases they used it as input for preparation of there cattle feed.

question we have is based on GST council meeting 47-48 they have give amendment that based on prevailing past confusion ,previous sales should be considered on 'is on basis' .

does that imply that we will not have to pay GST for the same for the past period?

please let us know how we should approach this,

[Shilpi Jain]

You are referring to this Circular 179/2022.

In this it has been clarified:

Accordingly, it is hereby clarified that the subject goods which inter alia is used as cattle feed ingredient are appropriately classifiable under heading 2302 and attract GST at the rate of 5% vide S. No. 103A of Schedule-I of notification no. 1/2017-Central Tax (Rate), dated the 28th June, 2017 and that for the past, the matter would be regularized on as is basis as mentioned in para 8.6

As is basis would indicate that whether for the past, for the goods referred in the circular, even if it was considered as an exempt goods though GST @ 5% was applicable, no demand would be issued

[husen kadwalwala]

Dear sir,

We have been given SCN for the same charges. parties used the cattle feed in their end product to make oil and cattle feed. Parties them self have given statements during the inquiry from department that our product is used in there process. They make oil and cattle feed. Out of 4 parties cattle feed is sold by 2 without GST and 2 have collected 5 % GST.

We have lab report saying there is only 7 % oil in our product and the parties using this product in there process keep more then 10 % in there cattle feed. So it proves it can't be used to extract Oil. It is only used for cattle feed.

This 4 parties constitute 2 % of our sales we have other 98 % saying it is directly used for cattle consumption and they are willing to give affidavit for the same.

Lab report was done in GST department but they did not Give us the report also and did not. Mention in SCN.

all the sales to the parties using it in process is done by us during 2017-20 and we did not sale our product to companies as we were afraid of 5 % GST.

All the sales post 2020 we have done to end users only.

Please advice how we approach this SCN.

AI Summary

Manufacturer Questions Retrospective GST on Cattle Feed By-Product; Seeks Clarity on Show Cause Notice for 2017-2020 Sales A manufacturer of 'makka poha' inquired about GST implications for their by-product, cattle feed, which they previously sold with a 0% GST rate. They referenced a GST Council amendment suggesting past sales should be treated 'as is,' questioning if this exempts them from retrospective GST payments. A response clarified that goods used as cattle feed should be classified under heading 2302 with a 5% GST, but past sales would not incur demand if previously exempt. The manufacturer received a Show Cause Notice (SCN) for sales between 2017-2020 and seeks advice on addressing it, highlighting that most sales were for direct cattle consumption.