2021 (6) TMI 1130 - AAR - GST

Classification of goods - rate of GST - Waterproof Trellis support for climbing plants manufactured by using bamboo and High-Density Polyethylene - HELD THAT - Only those tools, implements, etc., made of base metals are classifiable under Chapter 82 of the Tariff and items whose working part is not one of the base metals are to be classified according to the constituent material of the working part - in Chapter 8201, the specifics are spades, shovels, mattocks, picks, hoes, forks and rakes, axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and the subsequent phrase and other tools of a kind used in agriculture is a general expression following the specific enumeration. The specifics mentioned are all of which has a working edge as required for a tool to be classified under Chapter 82. Thus only those hand tools which are of base metal and has a working edge, used as a hand tool in agriculture merits classification under this residual entry. The product at hand is definitely not made of base metal nor it has a working edge as required of a tool under this Chapter and therefore the applicant's product by no stretch of imagination could be classified under Chapter 8201, as claimed by the applicant. Classification under a Heading is to be governed only by the relevant Tariff-entries, Heading-description, etc. Heading 8201, does not envisage that all items used in an agriculture field would be covered therein. The instant product can also not be classified under 8201 as Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry - The impugned product is purely a support made of bamboo for creeper vegetables/ crops. Thus the conclusion that the applicant is not eligible for exemption from tax on the said waterproof Trellis support for climbing plants using Bamboo and High-Density Polyethylene', provided under Notification no. 2/2017-Central Tax (Rate), dated 28-6-2017. Section II CHAPTER 14 of Customs Tariff covers Vegetable plaiting materials; vegetable products not elsewhere specified or inducted. Tariff item 14011000 covers Bamboos in its ambit. Chapter note 2 of Chapter 14 specifies that Heading 1401 applies, inter alia, to bamboos (whether or not split, sawn lengthwise, cut to length, rounded at the ends, bleached, rendered non-inflammable, polished or dyed), split osier, reeds and the like, to rattan cores and to drawn or split rattans. Accordingly, the subject item is classifiable under CTH 14011000.

Summary

Issues Involved:
1. Classification of the product "Waterproof Trellis support for climbing plants using bamboo and High-Density Polyethylene" under GST.
2. Eligibility for GST exemption under Notification No. 2/2017-Central Tax (Rate), dated 28th June 2017.

Issue-wise Detailed Analysis:

1. Classification of the Product:
The applicant, M/s Bhavya Srishti Udhyog Private Limited, manufactures a product named "Waterproof Trellis support for climbing plants using bamboo and High-Density Polyethylene." The product consists of bamboo sticks coated with High-Density Polyethylene to make them weatherproof and resistant to rotting, breaking, heat, light, and water. The product also includes a ground anchor made of Nylon 66 plastic with a self-drilling mechanism for easy installation.

The applicant contended that their product should be classified under heading 8201 of the Custom Tariff Act, 1975, which pertains to "Agricultural implements manually operated or animal driven," and should attract a NIL rate of GST as per Notification No. 2/2017-Central Tax (Rate), dated 28th June 2017.

2. Eligibility for GST Exemption:
The applicant argued that their product is a tool used in agriculture, horticulture, or forestry and thus should be classified under heading 8201, making it eligible for GST exemption.

Legal Analysis and Discussion:
The authority examined the provisions of the CGST Act and the Chhattisgarh GST Act, 2017, which are similar. The product in question is bamboo treated with High-Density Polyethylene to enhance its durability and sturdiness. The authority referred to Notification No. 2/2017-Central Tax (Rate), dated 28th June 2017, which exempts certain goods from GST.

The authority noted that the classification of goods for GST purposes is based on the entries in the First Schedule to the Customs Tariff Act, 1975. The relevant section and chapter notes were examined, particularly Section XV, which covers base metals and articles of base metal, and Chapter 82, which covers tools, implements, cutlery, spoons, and forks of base metal.

The authority concluded that Chapter 82 covers only those articles made of base metals, whereas the applicant's product is made of bamboo treated with High-Density Polyethylene and does not qualify as a base metal. Therefore, the product does not fall under heading 8201.

The authority also cited the principle of 'ejusdem generis,' which specifies that general terms following particular expressions take their meaning from the preceding specific expressions. In this case, the specific items mentioned under heading 8201 are all tools with a working edge made of base metal. The applicant's product does not fit this description.

Conclusion:
The authority ruled that the applicant's product does not qualify for GST exemption under Sr. No. 137 of Notification No. 2/2017-Central Tax (Rate), dated 28th June 2017. Instead, the product merits classification under Custom Tariff Heading 14011000, which covers "Bamboos."

Order:
The ruling sought by the applicant was answered as follows:
The product "Waterproof Trellis support for climbing plants using bamboo and High-Density Polyethylene" is not eligible for exemption provided under Sr. No. 137 of Notification No. 2/2017-Central Tax (Rate), dated 28th June 2017. The product is classified under Custom Tariff Heading 14011000.