TaxTMI 
TaxTMI 
2021 (1) TMI 591
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....cant sells the products 'Zn EDTA' and 'Fe EDTA' in 25 Kgs. packing in HDPE Bags. A copy of labels affixed on bags of said products is also submitted by them. 4. The said products are covered underS. No. 1(g) of Schedule I, Part-A of the Fertilizer Control Order, 1985, as amended. Copy of said Schedule is enclosed. 5. The Applicant is registered under the Fertilizer Control Order, 1985. A Copy of Registration Certificate issued to the applicant by the Deputy Director of the Agriculture (Extension), District Mehsana, Gujarat under the Fertilizer Control Order, 1985 is also submitted by them. 6. The said products are used as fertilizer to overcome zinc deficiency and iron deficiency respectively, in plants as well as a source of zinc and iron respectively for those plants which require zinc and/or iron for their normal growth and higher yields. 7. In respect of classification of 'Micronutrient' under the erstwhile Central Excise regime, the Central Board of Excise and Customs (CBEC, now Central Board of Indirect Taxes and Customs-CBIC) issued clarification under various instructions/circulars, as follows: (i) It was clarified, vide instructions contained in CBEC's....
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.... 8. In above backdrops, the questions on which Advance ruling is sought are as follows: (i) Whether the products, 'Zn EDTA' (Zinc Ethylenediamine Tetra Acetic Acid) and 'Fe EDTA' (Iron Ethylenediamine Tetra Acetic Acid) being supplied by the applicant are classifiable under Chapter Headings 2833, 2921, 3105 or 3808 or any other Chapter Heading of the Customs Tariff Act, 1962? (ii) Whether the said products, `Zn EDTA' and 'Fe EDTA' being supplied by the applicant are covered under S. No. 182D of Schedule-I, S. No. 56 of Schedule-II, S. No. 40, 45 or 87 of Schedule-III, or any other S. No. of any of the Schedules of Notification No.1/2017-Central Tax(Rate) dated 28.06.2017(as amended) and corresponding Notification No.1/2017- State Tax (Rate) dated 30.06.2017(as amended) and Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017 (as amended)? and (iii) Whether the supply of the products, `Zn EDTA' and 'Fe EDTA' by the applicant to the recipient, who is not registered under the Fertilizer Control Order, 1985, will have any impact on the applicability of particular S. No. of the Schedules of the Notification No.1/2017-Central Tax(Rate) dated 28.06.2017....
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....d for preparing inks (iron inks), colours (Prussian blue), and the mixture (with slaked lime and sawdust) used for purifying coal gas; in dyeing; as a disinfectant, an antiseptic and a herbicide. (b) Ferric sulphate (Fe2 (S04)3). Prepared from ferrous sulphate. Powder or as brownish slabs. Very soluble in water, with which it forms a white hydrate (with 9 H20). Used for purifying natural waters or sewage, for coagulating blood in slaughterhouses, in iron-tanning and as a fungicide. As it lessens the buoyancy of ores, it is used as a floatation regulator. Used also as a mordant in dyeing and in the electrolytic production of copper or zinc." 9.3 Though the Chapter Heading 2833 covers Zinc Sulphate and Ferrous Sulphate, in the understanding of the applicant, the said Chapter Heading covers separate chemically defined compound. Therefore, 'Zn EDTA' and Fe EDTA', products being manufactured and supplied by the applicant may not be covered by Chapter Heading 2833 as these products are not separate chemically defined compound in as much as the product 'Zn EDTA' also contains around 6.9% Nitrogen and the product 'Fe EDTA' also contains around 6.5% Nitrogen. B. Chapter Headi....
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.... 3105 in terms of Chapter Note 6 of Chapter 31 of the Customs Tariff Act, 1975. 11.4 Hon'ble CESTAT had occasion to examine the proper classification of micronutrient in the case of Commissioner of Central Excise and Services Tax Hyderabad-IV Versus Aries Agrovet Industries Ltd., reported at 2017 (7) G.S.T.L. 317 (Tri.-Hyd.). In this case, after referring to various Circulars issued by the CBEC, Hon'ble CESTAT held as follows: "8.6 It is interesting to note that C.B.E.C. found it necessary to issue yet one more Circular No. 1022/10/2016-X, dated 6-4-2016, on the very issue of classification of micronutrients, plant growth regulators, etc. In the first para itself, the circular acknowledges that the issue of classification of these items remain a disputed area in Central Excise. On the basis of opinion obtained from Indian Agricultural Research Institute (IAR1), Central Excise Tariff explanatory notes, nature, usage, etc., the C.B.E.&C. has clarified, inter alia, that micronutrients are essential nutrients and required in small quantities for the normal growth and development of plants containing elements like iron, Manganese, Zinc, Copper, Boron, Molybdenum, Nickel, etc....
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...."other fertilizers" applies only to products of a kind used as fertilizers containing, as an essential constituent (emphasis applied) at least one of the fertilizing elements nitrogen, phosphorus and potassium. The department has relied upon clarificationissued by the Regional Fertilizer Control Laboratory, Chennai under cover of letters dated 30-10-2006 and 4-1-2007 that the products are micronutrient fertilizers under the Fertilizer Control Order and incidentally contained small quantities of nitrogen because of the chemical composition and cannot be claimed as primary source of nitrogen, to hold that nitrogen is not an essential constituent so as to classify the goods under Chapter 31. However, we note that the International Institute of Biotechnology and Toxicology (IIBT) has certified on 19-12-2006 that during the process of supply of potential micronutrients for the plant growth, once the micronutrients are delivered at the plant system EDTA breaks out resulting in elemental nitrogen which further helps to promote the plant growth and that without nitrogen, it is not possible to deliver the metal ions or micronutrients to the plant system. This certificate was placed by the a....
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.... amended) and Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017 (as amended), reads as follows: SCHEDULE I-2.5% S.No. Chapter/Heading/ Subheading / Tariff item Description of goods 182D 3105 Mineral or chemical fertilizers containing two or three fertilizing elements nitrogen, phosphorus and potassium; other fertilizers; goods of this chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 Kgs.; [other than those which are clearly not to be used as fertilizers] 13.2 As already submitted, the products, viz. 'ZN EDTA' and 'Fe EDTA' being manufactured and supplied by the applicant are appropriately classifiable under Chapter Heading 3105 in the understanding of the applicant, the said goods would be covered by S. No. 182D of Schedule-I of the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 (as amended) and corresponding Notifications issued under GGST Act, 2017 and IGST Act, 2017. B. S. No. 56 of Schedule-II: 14.1 Sr. No. 56 of Schedule-II of Notification No. 1/2017-Central Tax(Rate) dated 28.06.2017 (as amended) and corresponding Notification No.1/2017-State Tax (Rate) dated 30.06.2017 (as amended) and....
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....ucts, 'ZN EDTA' and 'Fe EDTA' are held to be classifiable under Chapter 28, 29 or 38, the same would be specifically covered by S. No.56 of Schedule-II of the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 (as amended), as already submitted above, and therefore these products would not be covered by S. No. 39, 40 or 87 of Schedule-III of the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 (as amended) and corresponding Notifications issued under the GGST Act, 2017 and IGST Act, 2017. 15.3 The products, 'ZN EDTA' and 'Fe EDTA' are micronutrient fertilizers and are used as micronutrient fertilizers. In the understanding of the applicant, S. No.45 of Schedule-III of the Notification No.1/2017-Central Tax (Rate) is applicable to those goods falling under Chapter Heading 3105, "which are clearly not to be used as fertilizers". Thus, to be covered by this S. No., the products should be such which are clearly not to be used as fertilizers. However, it is pertinent to note that S. No. 45 of Schedule-III do not cast any responsibility on the supplier to ensure end use of the product. Therefore, this S. No. would not be applicable to those goods of Chapter Heading 3....
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.... of Schedule-I of the said Notification. 16.3 Therefore, in the understanding of the applicant, the supply of products, 'Zn EDTA' and 'Fe EDTA' by the applicant to the recipient, who is not registered under the Fertiliser Control Order, 1985, will not have any impact on the applicability of S. No. 182D of Schedule-I of the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 (as amended), and corresponding Notifications issued under the GGST Act, 2017 and IGST Act, 2017. B. Classification as 'micronutrient' under Chapter 28 or 38: 17.1 The 'micronutrients' falling under Chapter 28 or 38 are covered under S. No. 56 of Schedule-II of the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 (as amended), and corresponding Notifications issued under the GGST Act, 2017 and IGST Act, 2017, as follows: SCHEDULE-II S.No. Chapter/Heading/ Subheading / Tariff item Description of goods 56. 28 or 38 Micronutrients, which are covered under serial number1(g) of Schedule 1, Part (A) of the Fertilizer Control Order, 1985 and are manufactured by the manufacturers which are registered under the Fertilizer Control Order, 1985. 17.2 It is to submit that in ....
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....007 reported at 2017 (7) G.S.T.L.317 (Tri.-Hyd.)], wherein the Hon'ble Tribunal, inter alia considered various Circulars, including Circular No.1022/10/2016-CX dated 06.04.2016, and held that the products Chelamin, Agromin, Chelafer and Chelacop would come under the ambit of micronutrient fertilizers and will then required to be classified as in "other fertilizers" in CETH 31.05. (B) The aforesaid view has been upheld in the subsequent decision of the Hon'ble CESTAT in case of Shivshakthi Bio Planteec td. Versus Commissioner of Central Excise, Customs & Service Tax, Hyderabad-I [Final Order no. A/3048-30483/2018 dated 31.01.2018 in Appeal Nos. E/27052, 27061/2013 and 22958-22959/2014, reported at 2019(20) G.S.T.L.243(Tri.-Hyd.)]. (C) The Assistant Commissioner (CPIO), Office of the Commissioner of Central tax, Central Excise & Service Tax, Medchal Commissionerate, vide Order No.15/2020 (RTI) dated 27.08.2020 (copy enclosed), has, inter alia informed as follows:- (i) The Final Order No. A/30767-30768/2017 dated 19.06.2017 in Appeal Nos. E/125-126/2007 in the case of Commissioner of Central Excise & Service Tax, Hyderabad-IV Versus Aries Agrovet Industries ....
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....in as much as the said decision have been accepted by the department on Merit. (G) In view thereof, the applicant has requested to kindly consider holding the correct classification of Micronutrient Fertilizers viz. 'Zn EDTA' and 'Fe EDTA' being manufactured and supplied by the applicant, under Chapter heading 31.05. It may kindly also be held that the said products attract GST @5% (CHST 2.5%+ SGST 2.5% or IGST 5%) under Sr. No. 182D of Schedule-I of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, as amended, and corresponding Notification issued under the Gujarat GST Act, 2017. DISCUSSION & FINDINGS: 19. We have considered the submissions made by the applicant in their application for advance ruling as well as at the time of personal hearing and additional submission dated 28.08.2020. We have also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts & the applicant's interpretation of law. 19.1 At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisio....
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....duct 'Zn EDTA' contains Zinc 12%+, Nitrogen 6.9%&EDTA Acid Salt and it has Ph level of 6 - 6.5. The product 'Fe EDTA' contains Iron-12%+, Nitrogen-6.5% &EDTA Acid Salt and it has Ph level of 6-6.5. They sell the products, 'Zn EDTA' and 'Fe EDTA' in 25 Kgs. packing in HDPE Bags. 23. The applicant submitted that the products, 'Zn EDTA' and 'Fe EDTA' are covered under Serial No. 1(g) of Schedule 1, Part (A) of the Fertilizer Control Order, 1985 (as amended). They further submitted that the Applicant is registered under the Fertilizer Control Order, 1985 (as amended); that the said products are used as fertilizer to overcome zinc deficiency and iron deficiency respectively, in plants as well as a source of zinc and iron respectively for those plants which require zinc and/or iron for their normal growth and higher yields. 24. In order to determine the tax liability on the supply of said products, we are required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 prescribing the rates of Central GST applicable to various goods, which are covered under 6 schedules as under: (i) 2.5 per cent. in respect of goods specified in Schedule I, (ii....
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...., Gibberellins, Cytokinins, Abscisic acid(ABA) and Ethylene. They work together coordinating the growth and development of cells. Ethylene is mainly involved in abscission and flower secscence in plants and is rarely used in plant tissue culture. In addition to the five principal growth regulators, two other groups sometimes appear to be active in regulating plant growth, the brassinosteroids and polyamines. Auxins stimulate cell elongation and influence a host of other developmental responses, such as root initiation, vascular differentiation; Cytokinins are able to stimulate cell division and induce shoot bud formation. They usually act as antagonists to auxins, Cytokinins often inhibit embryogenesis and root induction; Gibberellins: The main effect of gibberellins in plants is to cause stem elongation and flowering. They are also prominently involved in mobilization of endosperm reserves during early embryo growth and seed germination; Abscisic acid (ABA) in plants is a terpenoid involved primarily in regulating seed germination, including storage protein synthesis and modulating water stress. In plant tissue culture, it is used to help somatic emryogenesis, particularly during ....
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.... nutrients that affect the physiological processes of growth and development in plants when applied in low concentration. Plant growth regulators are active at low concentrations in promoting, inhibiting or modifying growth and development. They are either natural or synthetic compounds that are applied directly to a target plant to alter its life processes and its structure to improve quality, increase yields, or facilitate harvesting etc. These are in the nature of plant hormones and classical of them are auxins, cytokinins, gibberellins (all three promoters) and abscisic acid, ethylene (both inhibitors). PGRs in the list are not exhaustive and more growth substances are being discovered in this category. PGRs are naturally produced by plants and they act by controlling or modifying, plant growth processes such as formation of leaves and flowers, elongation of stems, development and ripening of fruits etc. Synthetic organic chemicals are also used as PGRs and are industrially produced and marketed. 27.3 It would, thus, be noted that PGRs are different from nutrients, be it macronutrient or micronutrient. PGR as a substance is specifically covered under HSN 3808. More specifica....
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....ARATIONS OF THE CHEMICAL OR ALLIED INDUSTRIES (INCLUDING THOSE CONSISTING OF MIXTURES OF NATURAL PRODUCTS), NOT ELSEWHERE SPECIFIED OR INCLUDED 3824 99 -- Other: --- Ammoniacal gas liquors and spent oxide produced in coal gas purification, case hardening compound, heat transfer salts; mixture of diphenyl and diphenyl oxide as heat transfer medium, mixed polyethylene glycols; salts for curing or salting, surface tension reducing agents: 3824 99 90 --- Other" 28. Keeping in mind the discussion made herein above with respect to Fertilizers, Plant Growth Regulators and Micronutrients, we shall now move on to discuss the said products and further to classify them accordingly. 28.1 As stated by the applicant that the products, viz. 'ZN EDTA' and 'Fe EDTA' are used as fertilizer to overcome zinc deficiency and iron deficiency respectively, in plants as well as a source of zinc and iron respectively for those plants which require zinc and/or iron for their normal growth and higher yields. Further, 'Zn EDTA' contains Zinc 12%+, Nitrogen 6.9% &EDTA Acid Salt and 'Fe EDT....
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....grovet Industries Ltd., reported at 2017 (7) G.S.T.L. 317 (Tri.-Hyd.) and CIBA India Ltd. Versus Commissioner of Customs, Chennai, reported at 2009 (237) E.L.T. 207 (Tri.-Chennai), wherein Hon'ble CESTAT dealt with dispute of the classification of micronutrients in Central Excise Regime and, hence, ratio of the same cannot be applied in GST regime. 31. The applicant has further contended that there is no condition under S. No. 56 of Schedule-II of the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 (as amended) that the buyer/recipient of 'micronutrient fertilizer' should also be registered under the Fertiliser Control Order, 1985, in the understanding of the applicant, the supply of products, 'Zn EDTA' and 'Fe EDTA' by the applicant to the recipient, who is not registered under the Fertiliser Control Order, 1985, will not have any impact on the applicability of S. No.56 of Schedule-II of the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 (as amended), and corresponding Notifications issued under the GGST Act, 2017 and IGST Act, 2017. We agree with the above contention of the applicant and hold that the supply of the products `Zn EDTA' and 'Fe EDTA' by th....