2019 (8) TMI 1284 - AAR - GST

Classification of goods - Cattle Feed in Cake form - exempt goods or not - whether the product is classifiable under CTH 2305 or under CTH 2309? HELD THAT - The product in hand, the Cattle feed is manufactured using Groundnut oil cake as a raw material along with other raw materials. Further, as per the test reports, the content of ash, protein, salt, fat, moisture, calcium, phosphorous etc in a sample of groundnut oil cake vary in percentage from a sample of the product as furnished by the applicant in the test reports furnished by them - Also, from the invoices raised by them the product is identified as Cattle feed and not as groundnut oil cake . By applying the General rules for interpretation of Customs Tariff as applicable to GST Tariff, the product in hand is correctly classifiable under Chapter Heading 2309 of the GST Tariff as Preparation of a kind used in Animal Feeding - Compounded animal feed, 2309 90 10. The same is exempted in case of intra-state supplies vide sl.no. 102 of Notification No. 2/2017 -Central Tax (Rate) dated 28 th June 2017 as amended and sl.no. 102 of Notification No. II(2)/CTR/532(d-5)/2017 dated 29 th June 2017 as amended and in case of interstate supplies vide Sl.No. 102 of Notification No. 2/2017 -Integrated Tax(Rate) dated 28 th June 2017 as amended.

Summary

Issues Involved:
1. Classification of "Cattle Feed in Cake Form" under GST.
2. Determination of tax liability and exemption status under GST laws.

Issue-wise Detailed Analysis:

1. Classification of "Cattle Feed in Cake Form" under GST:

The applicant, engaged in the manufacture of "Cattle Feed in Cake Form," sought an advance ruling on the classification of their product. They provided details of the manufacturing process and the ingredients used, which include groundnut oil cake, broken rice, jaggery, salt, and water. The product is processed and sold as cattle feed for domestic animals. The applicant referenced past proceedings and claimed that their product should be classified similarly to their sister concern's product, which was exempt under previous tax enactments.

The jurisdictional authority argued that the product, despite being processed, retained the characteristics of groundnut oil cake, which is taxable. They suggested that the product should be classified under entry 14- Tariff item 0410 of the TNGST Act 2017, liable to tax at 2.5%.

The Authority for Advance Ruling examined the details and documents provided. They analyzed the product's composition and manufacturing process, noting that it is not merely groundnut oil cake but a mixture of various ingredients processed into a solid form. The product is intended for animal feeding, providing essential nutrients for growth and production purposes.

2. Determination of tax liability and exemption status under GST laws:

The Authority referred to Notification No. 1/2017 - Central Tax (Rate) and the relevant entries in the Customs Tariff Act, 1975. They considered whether the product should be classified under CTH 2305 (Oil-cake and other solid residues) or CTH 2309 (Preparations of a kind used in animal feeding). The explanatory notes indicated that Chapter Head 2309 covers products used in animal feeding that have lost the essential characteristics of the original material.

The Authority concluded that the applicant's product, being a compounded animal feed, falls under Chapter Heading 2309 of the GST Tariff, specifically under "Compounded animal feed, 2309 90 10." This classification aligns with the product's intended use and its processed nature, differentiating it from simple groundnut oil cake.

Ruling:

The Authority ruled that the product "Cattle feed in cake form" manufactured by the applicant is classifiable under Chapter Heading 23099010. It is exempt from tax as per Sl.No. 102 of Notification No. 2/2017-Central Tax (Rate) dated 28th June 2017, as amended, and corresponding notifications for intra-state and inter-state supplies.