TaxTMI 
TaxTMI 
2022 (12) TMI 122
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....ted 25/7/2022, seeking advance ruling by filing ARA-01 form along with annexures and attachments. Thereafter the applicant under their e-mail dated 4/8/2022 furnished the details of challans evidencing payment of fees stipulated for obtaining an advance ruling under sub-section (1) of section 97 of CGST Act, 2017 read with Rule 104 of Central Goods and Service Tax Rules, 2017 in the manner specified in Section 49 ibid. Thus, the application complete in all respect has been filed by the applicant on 4/8/2022.The applicant has filed the instant application under section 97 of the CGST Act, 2017 / Chhattisgarh Goods & Services Tax Act, 2017 seeking advance ruling regarding Classification and applicability of GST on sale of rejected paddy seed which according to them are not fit for human consumption and could be used for Industrial usage, Cattle feed production, Manure production etc. 2. Facts of the case: - 2.1 M/s SHRADDHA TRADERS (Prop: Mr. DONGARMAL JAIN), (hereinafter referred as applicant) is registered under GST having registration No. 22ACGPJ3748N1ZE.The applicant is engaged in the business of running a rice mill and the present application has been filed by them seeking....
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.... of rejected paddy is covered under HSN Code - 1006 10 10 has been taken in the Appellate Advance Authority Ruling, Uttarakhand in the case of M/s Sam Overseas -Order No. 08/18-19/30.03.2019 dated 30.03.2019. In view of aforesaid position, they are of the opinion that the same is classifiable under HS Code 1006 10 10. Copy of the aforesaid Appellate Advance Authority Ruling has also been enclosed. 3.4 That, once Sale of rejected Paddy is covered under the HSN Code 1006, for GST Rate they referred to the amended Notification 1/2017 - Central Tax (Rate) dated 28.06.2017 for Tax rate of Goods & amended Notification No. 2/2017 - Central tax (Rate) dated 28.06.2017 for exemption in case of supply of goods. That, S.No. 51 of Schedule - I of Amended Notification No. 01/2017-Central Tax Rate dated 28.06.2017 provides for taxability of Rice (pre-packaged and labelled) covering HSN 1006 @ 2.5% CGST & similar rate of SGST. That, Entry No. 70 of Amended Notification No. 02/2017 - Central Tax Rate dated 28.06.2017 as amended by Notification No. 07/2022 dated 13.07.2017 provides the exemption from taxability of Rice which is other than pre-packaged and labelled. 3.5 That, Notificatio....
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....That, in the light of above provisions, advance ruling is sought for classification & applicability of GST Rate in sale of Rejected Paddy. 4. Personal Hearing: Keeping with the established principles of natural justice, personal hearing in the matter was extended to the applicant in person, as requested by them and accordingly, Shri Shubham Jain CA authorized representative of the applicant, M/s. Shraddha Traders, Jeora Sirsa village, Dist. Durg, Chhattisgarh attended the personal hearing in the matter before us on 31.10.2022. It was his submission that they are seeking advance ruling regarding classification & applicability of GST on sale of Rejected Paddy Seed which according to them is not fit for human consumption and could be used for Industrial Usage, Cattle Feed Production, Manure Production etc. He further informed that they are engaged in the business of running a rice mill and that they had recently been awarded tender by Chhattisgarh State Cooperative Marketing Federation for purchase of Rejected paddy and that out of the said purchase, certain portion could be sold as such. He reiterated the points raised in their ARA-01 application. 5. The legal position, anal....
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....ncerned officer or the jurisdictional officer as stipulated above. 7. We have gone through the submissions made by the applicant and have examined the contentions raised by them. At the outset, we find that the issue raised in the application is squarely covered under Section 97 (2) (a), Section 97 (2) (b) and Section 97(2) (e) of the CGST Act 2017 being a matter related to classification of goods, applicability of a notification issued under the provisions of this Act and determination of the liability to pay tax on any goods. We, therefore, admit the application for consideration on merits. 8. Now we proceed to decide the issues raised by the applicant on merits. The issues covered in the instant case in hand is regarding classification and applicability of GST on the said rejected paddy seed procured by the applicant from Chhattisgarh State Cooperative Marketing Federation, which the applicant intends to supply further downstream. In this context, the Noticee in their writeup has submitted that they had referred to GST tariff, but they could not find any specific entry for Rejected Paddy Sale and that in such a case when there is no specific entry in GST tariff, reference ....
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....he Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. Therefore, it is implied by virtue of above explanation that the classification of goods has to be done in accordance with Customs Tariff Act 1975. However, once the heading/tariff item is arrived at, the rate of GST would be governed by above notification. 9.2 In the aforesaid context, it is seen that SECTION-II CHAPTER-10 covers Cereals. Further section NOTES therein specifies that: 1. (A) The products specified in the headings of this Chapter are to be classified in those headings only if grains are present, whether or not in the ear or on the stalk. *(B) This Chapter does not cover grains which have been hulled or otherwise worked. However, rice, husked, milled, polished, glazed, parboiled or broken remains classified in heading 1006. Similarly, quinoa from which the pericarp has been wholly or partly removed in order to separate the saponin, but which has not undergone any other processes, remains classified in heading 1008. 2. Heading 10....
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....ed, nevertheless the classification of the goods in question under heading 1006 claimed by the applicant would depend upon the other determination factors supra as also the rules of interpretation, section notes and chapter notes as specified and discussed herein above. 11. In view of the above discussions we are of the considered view that purely based on the description of the goods mentioned in the tender / agreement document with Chhattisgarh State Cooperative Marketing Federation i.e., rejected paddy / damaged paddy (not fit for human consumption) would merit classification under chapter heading 1006 10, subject to stipulations and conditions as mentioned in the Section note and chapter note. Any further classification i.e., whether the rejected paddy/damaged paddy is of seed quality or other is not possible in absence of further description or technical information or parameters of the impugned goods. 12. Now coming to the applicable tax rate on such goods, as discussed there is no doubt that the same depends upon the classification of the goods in question as discussed above and the effective rates of such goods are specified in schedules appended to Notification no. 0....
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....(Rate) dated 28.6.2017 as amended vide Notification No. 6/2022-Central Tax (Rate)New Delhi, the 13th July 2022, effective from 18.7.2022. 12.3 Further it is observed that Notification no. 02/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no. 07 / 2022-Central Tax (Rate)dated 13.7.2022 under S.no. 70 prescribes exemption from the whole of central tax leviable thereon under section 9 of CGST Act, 2017 only on "Rice other than pre-packaged and labelled" falling under chapter heading 1006 and not on Paddy or for that matter "rejected paddy/ damaged paddy". For the sake of convenience, the relevant text of Notification no. 02/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no. 07 / 2022-Central Tax (Rate) dated 13.7.2022 is reproduced hereunder: - Schedule S.No. Chapter/Heading /Sub-heading/ Tariff item Description of Goods (1) (2) (3) 1. ----- -------- 2. ----- -------- 3. ----- -------- ....... ----- -------- 65.. 1001 Wheat and meslin other than pre-packaged and labelled 66. 1002 Rye other than pre-packaged and labelled 67 1003 Barley other than pre-packag....
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....e that do not require declaration(s)/compliance(s) under the Legal Metrology Act, 2009 (1 of 2010), and the rules made thereunder, the same would not be treated as pre-packaged and labelled for the purposes of GST levy In the context of food items (such as pulses, cereals like rice, wheat, flour etc.), the supply of specified pre-packaged food articles would fall within the purview of the definition of 'pre-packaged commodity' under the Legal Metrology Act, 2009, and the rules made thereunder, if such pre-packaged and labelled packages contained a quantity upto 25 kilogram (or 25 litre] in terms of rule 3 (a) of Legal Metrology (Packaged Commodities) Rules, 2011, subject to other exclusions provided in the Act and the Rules made thereunder. From the above it gets abundantly clear that only those goods of chapter 10, specifically described and listed out at Sr.no. 65 to 72 of the Notification no. 02/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no. 07 / 2022-Central Tax (Rate) dated 13.7.2022 are exempted from whole of tax and not Paddy or for that matter "rejected paddy / damaged paddy". Thus, we come to the considered conclusion that "rejected pad....
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....t on the circumstances and adherence to the conditions stipulated. Further as already discussed in the preceding para, section 103 of CGST Act, 2017 stipulates about the ruling pronounced as under: - The advance ruling pronounced by the Authority, or the Appellate Authority under this Chapter shall be binding only - a. On the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling; b. On the concerned officer or the jurisdictional officer in respect of the applicant. Thus, in view of the above section 103 of CGST Act, 2017, the ruling given in the cited case would be binding only on the relevant applicant and on the concerned officer or the jurisdictional officer as stipulated above Having regard to the facts and circumstances of the case and discussions as above, we pass the following order: - ORDER (Under section 98 of the Chhattisgarh Goods and Services Tax Act, 2017) No. STC/AAR/08/2022 Raipur Doted 31/10/2022 The ruling so sought by M/s Shraddha Traders, JeoraSirsa village, District Durg, Chhattisgarh GSTIN--22ACGPJ3748N1ZE the applicant is accordingly answered as under: - ....