2018 (10) TMI 1049 - AAR - GST

Rate of GST - Coir Pith - What is applicable GST rate for Coir Pith? - Held that - The products in question are coir pith in raw form which is either sold as loose form or supplied by the applicant in Blocks, Briquettes form without any addition of chemicals. It is different from coir fibre. Further, the coir pith supplied by the Applicant does not undergo composting process, which would alter its composition and cannot be called as coir pith compost. Hence coir pith in its raw form whether in loose powder or compressed into blocks form are taxable at 2.5% CGST as per Sl. No 215 of Schedule I of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 as amended and at 2.5% SGST as per Sl.No. 215 of Schedule I of G.O. (Ms) No. 62 dated 29.06.2017 No. II (2)/CTR/532(d-4)/2017. Ruling - Coir pith in its raw form whether in loose powder or compressed into blocks form without any addition of chemicals supplied by the applicant are taxable at 2.5% CGST as per Sl No 215 of Schedule 1 of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 as amended and at 2.5% SGST.

Summary

Issues:
- Determination of applicable GST rate for Coir Pith.

Analysis:
The Applicant, engaged in trading Coir Fibre, Coir Pith, and Curled Coir, sought an Advance Ruling on the applicable GST rate for Coir Pith. Coir pith, a by-product of the coir fibre processing industry, constitutes a significant portion of the coconut husk. The applicant highlighted that coir pith was exempted under previous VAT and Excise Acts but lacked a specific GST rate. They provided details on the manufacturing process and product classification, emphasizing that coir pith is distinct from coir fibre. The Authorities examined the submissions and invoices, confirming that the applicant dealt with raw coir pith in loose powder or compressed blocks form.

The classification of the product under the Customs Tariff Act was crucial in determining the applicable GST rate. The Authorities referred to Chapter Heading 5305, distinguishing between coir pith and coir fibre. As per the notifications, coir pith in its raw form, not undergoing composting, was taxable at 2.5% CGST and SGST. The exemption list differentiated between coir fibre and coir pith compost, clarifying the tax treatment applicable to raw coir pith.

In conclusion, the ruling stated that Coir Pith in its raw form, whether loose powder or compressed blocks without added chemicals, is taxable at 2.5% CGST and SGST. The decision was based on the specific classification and tax exemptions outlined in the relevant notifications, ensuring clarity on the tax treatment of the product in question.