2019 (8) TMI 1214 - AAR - GST

Rate of IGST - Classification of goods - export of single super phosphate - taxable territory - N/N. 1/2017 - IT (Rate) dated 28/06/2017 - Circular No. 54/28/2018-GST dated 09/08/2018 - HELD THAT - IGST payable on SSP is 18% under Sl No. 43 of Schedule III the Rate Notification, provided it is clearly not to be used as fertiliser . Otherwise, it is taxable @ 5% under Sl No. 182B of Schedule I of the Rate Notification. Circular No. 54/28/2018-GST dated 09/08/2018 clarifies the phrase to be used as fertiliser . Whether the benefit of concessional rate is available when the goods are not to be consumed in India? - HELD THAT - No provisions of the Act, beneficial or otherwise, are applicable beyond the taxable territory defined under section 2(22) of the IGST Act. Therefore, tax under the Act can be imposed on supplies, other than the zero rated ones, only when the goods or services are consumed within the taxable territory, which extends to India under section 1(2) of the IGST Act. Reference to the consumption of SSP as fertilizer in the Rate Notification, therefore, is limited to consumption in India only. Clearly, the SSP being exported is not to be used as fertiliser in India, as the place of supply, according to section 11 (b) of the IGST Act, will be the location outside India. The applicable rate of IGST is, therefore, 18% under Sl.No. 43 of Schedule III of the Rate Notification.

Summary

Issues:
1. Admissibility of the Application
2. Observations and findings of the Authority

Admissibility of the Application:
The Applicant, a manufacturer of chemical fertiliser, seeks a ruling on the applicable rate of IGST for exporting 'single super phosphate' (SSP). The question raised is deemed admissible under section 97(2)(b) of the GST Act. The Applicant confirms no pending issues under the GST Act, and the revenue officer has not objected to the application, leading to its admission.

Observations and findings of the Authority:
The Authority determines that IGST on SSP is 18% if not to be used as fertiliser, else taxable at 5%. Circular No. 54/28/2018-GST clarifies the concessional tax rate for fertilisers used directly or in complex fertilisers for agricultural purposes. Exported SSP qualifies as a zero-rated supply, allowing for a refund of input tax credit or payment of applicable IGST for refund. The applicable IGST rate considers consumption within India, with the ruling establishing that SSP exported for non-fertiliser use outside India falls under the 18% tax rate.

In conclusion, the ruling states that when exporting 'single super phosphate,' the Applicant should pay IGST at 18% under Sl No. 43 of Schedule III of the relevant Notification if opting for a refund as per section 16(3)(b) of the IGST Act. This ruling remains valid unless declared void under the provisions of the GST Act.