TaxTMI 
TaxTMI 
2023 (7) TMI 189
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....ir product falls under the category of 'unmanufactured tobacco without lime tube; that they will not be selling any tube of lime inside the pouches; that though the waste tobacco is mixed with natural clay and water, the nature of the product is not altered & even the consumer base remains the same ie tobacco manufacturers; that it is never used in pan masala and is never put in a paan [also called betel quid, (source Britannica)]; that it is different from chewing tobacco and zarda scented tobacco; that as per their understanding GST compensation cess is also not leviable on the product. The applicant has further informed that it is sold in 30-35 kg bags & its price range is also not similar to that of chewing/scented tobacco. 5. In view of the foregoing, the applicant has sought a ruling on the following question viz 1. What will be the classification of the goods 'Kandi Rave'. 6. Additional Commissioner(Technical), Central Goods & Service Tax, Vadodara-I Commissionerate, vide his letter no. IV/16-22/Tech/AR/M/s. D R Patel/22-23 dated 17.3.23, offered the following comments viz • that the activity/service in respect of which Advance Ruling is sought is....
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....8-6-20171 Rate of Tax (Schedules) for specified goods under CGST - Schedules Ito VI In exercise of the powers conferred by sub-section (1) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the central tax of - (i) 2.5 per cent. in respect of goods specified in Schedule I, (ii) 6 per cent. in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, (iv) 14 per cent. in respect of goods specified in Schedule IV, (v) 1.5 per cent. in respect of goods specified in Schedule V, and (vi) 0.125 per cent. in respect of goods specified in Schedule VI appended to this notification (hereinafter referred to as the said Schedules), that shall be levied on intra-State supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. Schedule IV....
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....17 (15 of 2017)"; 2. This notification shall come into force on the day of April, 2023. THE FINANCE ACT, 2023 No. 8 of 2023 [31st March, 2023] Goods and Services Tax (Compensation to States) Act 163. In the Schedule to the Goods and Services Tax (Compensation to States) Act, 2017.- (c) the following Explanation shall be inserted at the end, namely:- 'Explanation.-For the purposes of this Schedule.- (1) "retail sale price" means the maximum price at which the concerned goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like and the price is the sole consideration for such sale: Provided that where the provisions of the Legal Metrology Act, 2009 or the rules made thereunder or any other law for the time being in force require to declare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall be construed accordingly: (ii) where on the package of any concerned goods ....
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....ocures unprocessed tobacco from the farmer; the tobacco waste obtained thereafter is crushed. This crushed tobacco waste is thereafter mixed with natural clay and water. This mixture is thereafter dried & packed. It is subsequently supplied to tobacco manufacturers in 30-35 kg packs. 13. The applicants contention is that this process undertaken by them on the tobacco waste does not amount to manufacture as defined under Section 2(72) of the CGST Act, 2017. The CGST Act, 2017, defines manufacture as processing of raw material/ inputs in any manner which results in emergence of a new product having a distinct name, character and use. 14. The applicant has further contended that their product, is unfit for consumption; that they do not sell their product with lime tube; that the mixing does not alter the nature of the product & the consumer base remains the same; that it not used with pan-masala, nor is it put in paan; that this is not a product like chewing tobacco with or without lime tube. 15. Chapter 24, tariff item 2401, which deals with unmanufactured tobacco, is reproduced below for ease of reference: Tariff Item Description Unit Rate of Duty ....
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....at it still remains an unmanufactured tobacco. This is more so because even in terms of section 2(72) of the CGST Act, 2017, which defines manufacture, since no new product emerges post the crushing of tobacco refuse & mixing it with natural clay & water, we find it appropriate that the product is classifiable under CTH 2401 as 'unmanufactured tobacco; tobacco refuse'. We further hold that the supply of applicant of kandi Rave' is classifiable under 24013000. 17. Moving on to the contention of the applicant that no compensation cess is applicable, we find that the applicant has not disclosed the fact that as to whether they are using brand name for their product. The applicant was asked to provide additional submissions on the issue. The applicant, vide his additional submission received on 10.5.2023, has informed the they are not affixing any name or label on the packing, in which the packed goods are sold to their customers in 30-35 kgs bags. To substantiate the submission, the applicant has also provided the photograph viz The photographs adduced by the applicant depicts that the goods are being sold without any brand name, labelling etc. In view of the foregoing, since th....