TaxTMI 
TaxTMI 
2024 (2) TMI 1052
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....d (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 3. Brief Facts or the case: 3.1 M/s Zuari Farmhub Limited (hereinafter referred to as applicant") is engaged in manufacturing, trading and marketing of chemical Fertilisers, water soluble Fertilisers, seeds, pesticides and supply of allied services, all used in agriculture. The Applicant operates from 23 States / UTS In India, Applicant is having GST Registration number 37AABCZ4502EIZK. 3.2 The Applicant, as a process procures various raw materials generally known as micronutrients, such as Zinc, Manganese, Ferrous and so on, by way of imports or domestic purchases and prepares a mixture, to make it a micronutrient Fertiliser, by way of blending, as approved by Ministry of Agriculture of the particular State. It Is understood that the mixture varies based on the soil culture. Currently, the Applicant is in the process of manufacturing two different sets of products, the composition of which is detailed in tabular format herein below: Product I: Mangala Borosan Composition Product 2: Mangala G1 Composition Items: Items: Zinc Sulphate Monohydrate (ZnSO4.H2O) 32.50% Zinc Sulp....
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.... of Fertiliser and special mixture of Fertilisers, provisional Fertiliser, customised Fertiliser, Bio-Fertilisers specified in Schedule III and Organic Fertilisers specified in Schedule IV and nonedible deoiled cake fertilisers specified in Schedule V. Where, mixture of Fertiliser is defined in Section 2(n) of the FCO, 1985 as "mixture of Fertilisers" means a mixture of Fertilisers made by physical mixing two or more fertilisers with or without inert material in physical or granular form and includes a mixture of NPK fertilisers, a mixture of micronutrient fertilisers and a mixture of NPK with micronutrient Fertilisers; 1.2. Basis the above definitions, and further reading of Sl. No. 1 (f) of Part A of Schedule I to the above referred Order, products of the Applicant will be called as "Micronutrient Fertilisers", For the reasons cited supra, the products in question, will qualify and have to be considered as Fertilisers. 1.3. In addition to above, it must be noted that the products in question are specifically, wholly and solely designed to improve the plant growth, yield and quality of produce and will be supplied as "Micronutrient Fertiliser". In this regard, copy of packaging....
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....al constituent, at least one of the fertilising elements nitrogen, phosphorous or potassium". 1.7.4. In the instant case, products manufactured by the Applicant though docs not involve direct application of nitrogen, phosphorous or potassium (N, P, K, as they are referred to in the chemical terminology), it is relevant to take note that, in the process of application of the product by the end user, one of the trace elements, viz., nitrogen gets emanated, with help of which i.e., nitrogen, it becomes possible to deliver the metal ions or micronutrients to the plant system. 1.7.5. In this regard, Applicant is also submitting a certificate from an independent laboratory, which also confirms that proposed products, when manufactured using multiple chemicals and put to use as Fertilisers, will emanate nitrogen as referred in Para above. Copy of certificate from independent authority confirming the same is enclosed as Annexure 2 to this application. 1.7.6. Therefore, though not directly, in the mixture of chemicals (micronutrients), one of the trace elements, viz., Nitrogen is most certainly produced/emanates therein, when put to use, thus clearly making it Fertilizer for the purposes....
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....105.90 in the HSN Explanatory Notes (the EDTA chelate is separate chemically defined compound) is also misplaced for the reason that HSN Explanatory Notes to Chapter 29 clearly state that separate chemically defined compounds containing other substances deliberately added during or after their manufacture are excluded from Chapter 29 and the product in dispute contains zinc/manganese/iron which is deliberately added. In the light of the above discussion, we hold that the imported item falls for classification under CTH 3105.90 of the Customs Tariff Act, 1975 as micronutrient and not under CTH 29.22,-----" 1.9. Upon reading the relevant chapter notes, relevant entry of the chapter and upon placing the reliance on the judgements cited supra, Applicant understands that said product is eligible for classification as Fertiliser under Chapter 31 or First Schedule to the Customs Tariff Act, 1975. C. Resorting to classification under Chapter 38 which provides for classification of miscellaneous chemical products, and includes preparations of chemical industry or allied industries, would be inappropriate. 1.10. At the outset, Applicant herein brings to the attention of this Authority ....
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....8-digit code as 3105 9090. 2.1. Assuming that, the classification to be adopted for the products referred supra is 3105 9090, rate of GST would be applicable as tabulated below: Sl.No. Chapter /Heading /Sub-heading/ Tariff Item Description of Entry Schedule and Rate of GST 182D 3105 Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg; other than those which are clearly not to be used as Fertilisers Schedule I - 5% (CGST-2.5% and SGST -2.5% or IGST-5%) 45 3105 Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg, which are clearly not to be used as Fertilisers. Schedule III - 18% (CGST - 9% and SGST 9% or IGST 18%) 2.2. From the above table, two things emerge i.e., chemicals or minerals used as Fertilisers, will be classified under Schedule I to the Notification No. 01/2017 - Central Tax (Rate) d....
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....ronutrients and that it is as listed in sl.no. 1 (g) of Schedule I, Part (A) of FCO 1985, it would merit classification under the above entry if not under Heading 3105 90 90 of the Customs Tariff Act. Hence, the alternate classification would be as indicated in the table supra. 6. Personal Hearing: The proceedings of Personal Hearing were conducted on 03.08.2023, for which the authorized representative, R. Kushal Choudhary, attended and reiterated the submissions already made. 7. Discussion and Findings: We have examined the issues raised in the application in light of the facts and arguments submitted by the applicant. We have considered the submissions made by the applicant in their application for Advance Ruling. We have considered the issues involved from which advance ruling is sought by the applicant and the relevant facts along with arguments made by the applicant and also their submissions made during the time of the personal hearing. Basing on the above minute details, the following point emerges: Upon scrutiny of the subject product, it is imperative to highlight its divergence from the category of micronutrient blends. Rather, its composition is distinctly characte....