TaxTMI 
TaxTMI 
2018 (12) TMI 142
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.... II. The Applicant before commencing the business wants the clarification regarding tax liability on Neem Seed under GST Act and thus filed the application for the same. 3. Contention of the Applicant : (i) that, the use of Neem Seed need not specifically be only for sowing purpose (for it to be classified under Nil Rate GST), but also for the industrial and medicinal applications as well. (ii) that, classification of Goods and Services under GST Legislation is done as per the Indian Trade Classification (herein referred to as ITC) - HS (Harmonized Commodity Description and Coding System) Nomenclature, which is a standardized & International Product Classification System developed by World Customs Organization (WCO) and this HSN Code is being followed since 1986 to classify commodities for Customs and Central Excise, and now for GST classification as well. Neem Seed is categorized under HSN Code 12119014 under Indian Trade Classification (HS) - 2017. Description of the Chapter 12 of ITC - HS Code reads as below : - "OIL SEEDS AND OLEAGINOUS FRUITS; MISCELLANEOUS GRAINS, SEEDS AND FRLIIT; INDUSTRIAL OR MEDICINAL PLANTS; STRAW AND FODDER" (iii) that, on care....
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....ermined according to the terms of the heading and any relative section or chapter notes and, provided such heading or notes do not otherwise require, according to the provisions hereinafter contained.' (viii) that, since, the chapter heading amply provides the reference of "All goods of Seed Quality" whereby Neem Seed is the "Goods of Seed Quality" which is transacted as seeds in common parlance as well, they are of the opinion that Neem Seed should be classified under Nil CST Rate. 4. Personal Hearing :- In keeping with the established principles of natural justice, personal hearing in the matter was extended to the authorized representative of the applicant and accordingly, Shri Ishant Bansal (CA) appeared before us for hearing on 31-7-2018 and reiterated their contention. They also furnished a written Submission dated 31-7-2018, which has been taken on record. It was their contention that Neem Seeds belong to goods of seeds quality, however the words "seed quality" has not been defined in CST legislature. In cases where specific words are not defined, common parlance/ trade parlance is to be given precedence. Understanding of HSN documents in conjunction with....
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.... Code 1211 which contains "Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery in pharmacy or for insecticidal, fungicidal or similar purpose, frozen or dried, whether or not cut, crushed or powdered" and the rate of tax on items falling under this heading is 5% that is 2.5% CGST 2.5% SGST. However, there are two entries in HSN code 1211, one is of 0% GST and another is of 5% GST. Both of these entries are extracted here for the sake of making matter more clear. These are as follows : HSN DESCRIPTION RATE OF TAX 1211 Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, frozen or dried, whether or not cut, crushed or powdered. CGST 2.5% SGST 2.5% 1211 Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar ose, fresh or chilled. CGST 0% SGST 0% Looking at the entries above, it is crystal clear that when goods falling in above entries are sold 'fresh or chilled' it will be taxable at 0% GST but when it is sold 'frozen ....
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....sowing) includes all types of Neem Seed, whether for sowing or other uses and should be approved under tax free category. 6.6 The applicant has not come up with any evidence or logical explanation to substantiate their above contention. It has been unambiguously clarified in each entry mentioned in the schedules, issued under State and Central GST Acts as regard the applicable tax rate on any goods/ service along with the conditions and circumstances under which such goods/service shall be classified as tax free or taxable under specific tax slab. The following two pre-conditions need fulfillment for categorizing the neem seed so supplied by the applicant as tax free, as stipulated under HSN code 1211 - HSN DESCRIPTION RATE OF TAX 1211 Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, frozen or dried, whether or not cut, crushed or powdered. CGST 2.5% SGST 2.5% 1211 Plants and parts of plants (including seed and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled. CGST 0% SGS....