TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1030
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....e applicant by fraud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (hereinafter referred to as the 'Act') are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s. V.S. Trading Company (Prop. P. Vasudevan) at 71/122-A, Palaniappa Colony, Annathanapatty, Salem-636002 (hereinafter called as the "Appellant") is engaged in the business of Trading Tapioca Flour purchased from the registered dealers and effects sale within and outside the state of Tamilnadu. The appellant was supplied with Tapioca flour of 50Kgs Bags under Bill of Supply classifying the same under Tariff heading 1106 stating the product is exempted/NIL rated. They are registered under the GST Acts with GSTIN 33ACYPV6634M1ZK. 2. The Appellant had sought Advance Ruling on the fol....
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....ion from payment of GST for the said product which they classify under 1106. Accordingly, they sought clarification as to the classification of the said product, applicability of exemption notification, rate of tax applicable on the classification of the product and whether the trader/dealer is required to be registered under GST. 8. PERSONAL HEARING Personal hearing was held as scheduled on 11-08-2025 and Shri. P. Vasudevan, Proprietor Shri. A. Jayaseelan, General Secretary, Salem City Chamber of Commerce & Shri. D. Ganapathi Subramaniam, GST Practitioner appeared for the personal hearing as Authorised Representatives of the applicant. AR explained the process followed by the manufacturers and the product being dealt by them as a trader who procures it from the starch manufacturers. AR further informed that the product received by them are exempted and hence they are making exempted supplies. AR further claimed that the applicant is eligible for exemption provided under Notification No. 02/2017-CT (Rate) dated 28-06-2017, as the product is classifiable under Tariff Heading 1106 as Flour' which attracts NIL rate of duty. As requested by the members, the applicant subsequently....
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....l usage in the food industry and sago is used directly for human consumption. Thipppi, kappi is separately processed for animal feed at low cost. • The applicant further submits that the said product obtained is only from crushing of tapioca roots and not from starch or starch residue and shall not be classified under 230310. • Finally, for the above reasons, the applicant reiterates and contend that Thippi/tapioca flour is not obtained from starch or starch residues and hence the said product would only fit in the entry of 11062020 and not under 2303. DISCUSSION AND FINDINGS 10. We have carefully considered the submissions made by the appellant in their application and additional submissions made during the personal hearing along the documents furnished by them. 11. The issue to be decided in this case is classification of the product, applicability of exemption notification, determination of tax liability and whether such traders are required to be registered or not. 12. The applicant is a trader of 'tapioca flour' within and across the states. 'The goods are purchased in 50 Kgs/70 Kgs gunny bags with bill of supply from the suppliers as exem....
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....arge storage tanks. TAPIOCA FLOUR: • The fibrous part after crushing is the residue waste which is called as "Thippi'. Thippi obtained is wet and hence is dried to get 'dry thippi' and sold as such. • As per TNGST Act, 1959 and TNVAT Act, 2006, this thippi/kappi is included in the third schedule and tax exemption was provided by the State Government for sale of this Thippi/Kappi. • As suggested by GST officers, this product namely 'Sago pith(Waste Thippi) - HSN code 0714 - is chargeable to 0% GST and supplied. • This product namely, thippi/kappi is not consumable by humans but is used as an animal feed. Hence, it is not sold/supplied to SAGO. STARCH MANUFACTURE • After crushing, the casava milk is mixed with water and stored in storage tanks in slurry form for two days. • After two days, water stays above the slurry and the wet starch is precipitated at the bottom. This wet starch is collected and dries for two to three days to get 'dry starch. • This dry starch is classified under the HSN 1108 and GST at the rate of 12% is paid while making supply, This is used for human co....
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.... cassava peeled and dried and crushed. Casava flour is processed coarser, retain the toxicity and cannot be eaten raw due to presence of toxic chemicals which is retained. The processing of casava flour is very simple which involves cleaning, grinding, dehydration, crushing and drying. The casava flour contains protein, fat, and fibre from the entire root. The residue or the by-product we get from this process is only 'casava peels' since the roots are whole grinded. Accordingly, only the product prepared by the above process would rightly be classified under 1106 2020. 20. On the other hand, 'casava starch' is a pure carbohydrate extract without protein, fat or fibre, making it ideal for thickening and providing a smooth, clear texture when cooked. The 'casava starch' The method of preparation of casava starch is a tedious one and the milk extracted from casava roots undergo various other process to get a fine, white starch powder used in making sago and for use in the food industry. In addition to using in food industry, it is also used in the pharmaceutical, candy, and paper-making industries as a binder and stabilizer. This casava starch powder is rightly classifiable under ....
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....aking animal feed. Therefore, it shall be classified as a waste. Moreover, Chapter 23 is exclusively for residues used in the manufacture of animal feed in addition to the prepared animal feed. Hence, the classification of the applicant's product is rightly justified and classifiable under 2303 1000 only. 27. For a stage-I manufacturer, this residue is a wate as their primary objective is to extract starch powder and then make sago. If the Stage-I manufacturer discards this residue as waste without being reused or has no money value or marketability and incurs only cost of disposal, then the residue shall not be considered as a taxable product. As per the facts submitted by the applicant the Stage-I manufacturer is clearing the product to the II Stage manufacturer which has a value and marketability. 28. The statute, keeping in mind the usability of similar products, has provided a separate Chapter-23 for "Residues and waste from the food industries; prepared animal fodder", since the residues arising out of food industry has a marketability and can be used further in the preparation of animal fodder or for use directly as animal feed without any further processing. 29. In....
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.... starch after drying and powdering which is an edible preparation as well as for use in the food industry for further manufacture of food products. 35. Though, we accept that the applicant is not selling 'residues of starch' as such, but are selling it after sieving and drying to segregate based on the quality, content and colour as per the facts furnished by them. In the certified process of manufacture submitted by Stage-I manufacturer, they have stated that in the course of manufacture of starch and sago, by-products such as Thippi is produced, from which tapioca flour is produced. The end tapioca waste is called kappi - which is exclusively used for animal feed. From the facts submitted by the appellant, the by-product known as 'Thippi' is nothing but the residue emanating during the starch manufacture as stated by the appellant himself. Therefore, the product being dealt by the appellant is residues of starch manufacture and are classifiable under 23031000 as 'Residues of Starch manufacture and similar residues' chargeable to 5% GST. Tariff Head Description of Goods Rate of Tax 2303 1000 Residues of starch manufacture and similar residues, beet-pulp, bagasse ....