TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 510
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.... as adopted to GST can he treated as 'waste of sugar manufacture, whether or not in the form of pellets under heading 2303' attracting 5% of IGST (2.5% CGST + 2.5% SGST) as per Schedule I (Sr. No. 104) of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017 or not? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to "GST Act- would mean COST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by the applicant is as under:- 2.1 M/s Madhurya Chemical (hereinafter referred as 'applicant') is engaged in supply of 'Shatamrut Chyavan' (hereinafter referred to, as the subject product) which is a complete animal feed supplement and is used as a supplementary product to increase the nutritional value of molasses. In other words, it is a nutrition supplement to the cattle feed but canno....
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.... and additives, Wheat Bran and de - oiled cake) which attracts 0% GST whereas, Sr. No. 104 of Notification No. 1/2017 C.T. (Rate) dated 28.6.2017 (Schedule I) is solely for 2303 as Residues of starch manufacture and similar residues, beet pulp, baggage and other waste of sugar manufacture, brewing or distilling dregs and waste, whether or not in the form of pellets which attracts 5% IGST (2.5% CGST + 2.5% SGST). Hence, goods covered under '2302, 2304, 2305, 2306, 2308 and 2309' and supplied as cattle feed, shall attract 0% GST. 2.8 Applicant also submits that the very purpose of Sr. No. 104 (Schedule I) is to set aside the exemption (Sr. No. 102) under the Notification No. 2/2017 C.T. (Rate) dated 28.6.2017 attracting the 'NIL' rate of GST. Hence, applicant has a belief that their product will attract 5% GST under Sr. No. 104 of Notification No. 1/2017 C.T. (Rate) dated 28.6.2017 (Sch. I). 2.9 'Shatamrut Chyavan' is attracting GST at 5% because the relevant entry of Sr. No. 102 of Notification No. 2/2017 C.T. (Rate) dated 28.6.2017 is a general entry for cattle feed having no nutritional value/base to cover subject product manufactured by the applicant. 2.10 Vide letter dated 22....
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....on that the basic raw material of their product is molasses (60% of total ingredient as per chemical formula that submitted by applicant) & classified under Chapter No. 2303 2000 i.e. other waste of sugar is wrong. 3.4.1 During the manufacturing of sugar from sugarcane in sugarcane factory several valuable by products like molasses, bagasse, filter press cake, ash etc. are produced along with sugar. Among these byproducts molasses & bagasse are more valuable raw materials used in different manufacturing industries. In the process of manufacturing of sugar, bagasse emerges as residue / waste of sugarcane which is neither a manufactured product nor final product of sugarcane industry & therefore classified under subheading 2303 20 00, as bagasse & other waste of sugar manufacturing. In sugar manufacturing molasses is an intermediary product, or by product. It is not waste, as waste is never manufactured & it only emerges in the manufacture of final product. Hence Molasses attracts specific rate of duty under Tariff Heading 1703 of 1000 of the GST Tariff. Though the major residual mixture of the subject product is molasses, it does not fall under Chapter No. 2309 90 10 & therefore no....
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.... vegetable waste, vegetable residues and by-products of such processing". 5.3.3 Explanatory Notes to the Harmonized System states that Chapter Heading 23.09 covers sweetened forage and prepared animal feeding stuffs consisting of a mixture of several nutrients designed: (1) to provide the animal with a rational and balance daily diet complete feed); (2) to achieve a suitable daily diet by supplementing the basic farm produced feed with organic or inorganic substances (supplementary feed) and (3) for use in making complete or supplementary feeds. The Explanatory Notes further states that "The Heading includes products of a kind used in animal feeding, obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristics of the original material". 5.3.4 The Explanatory Notes at (I) under Chapter 23.09 states that "Sweetened Forage is a mixture of molasses or other similar sweetening substances (generally more than 10% by weight), with one or more other nutrients. It is used mainly for feeding cattle, sheep, horses or pigs. Besides being highly nutritive, molasses enhances the palatability off foodstuffs and thus extends t....
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....23.03, the Explanatory Notes state that "Other waste products of sugar manufacture covered by this heading include defecation scum, filter press residues, etc". The Explanatory Notes also mentions that the heading 23.03 does not include Molasses resulting from the extraction or refining 0,7sugar. 5.4.2 Thus Chapter Heading 23.03 would only cover residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste. 5.5 From the above discussions we observed that, while Chapter 23.03 covers only residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste, Chapter Fleading 23.09 specifically covers preparations of a kind used in animal feeding. 5.6 In view of the above, we hold that the subject product has been rightly classified by the applicant under Chapter Heading 23.09 and the said product, falling under TSH 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST, attracts 'NIL' rate as per Sr. No. 102 of Notification No. 02/2017 - Central Tax (Rate) dated 28.06.2017. 5.7 The second question raised by the appli....