2019 (8) TMI 1286 - AAR - GST

Classification of goods - Cattle Feed in Cake form - exempt goods or not - Notification No. 1/2017 - Central Tax (Rate) dt. 28-06-2017 - 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."
2. Applicability of GST exemption on the product.

Detailed Analysis:

Issue 1: Classification of "Cattle Feed in Cake Form"

The applicant, engaged in the manufacture of "Cattle Feed in Cake Form," sought an advance ruling on the classification of their product. The product is manufactured using groundnut oil cake, broken rice, jaggery, salt, and water, which is processed into a solid form and steamed. The applicant referenced previous rulings and historical tax exemptions under the TNGST Act 1959 and TNVAT Act 2006, asserting that their product should be exempt from GST.

The jurisdictional authority argued that the product, despite being processed, retains the characteristics of groundnut oil cake, which is taxable under Sl.No 106 (Tariff item 2305) at 2.5%. However, they noted that the product is not explicitly listed as exempt under the TN GST Act 2017.

The Authority for Advance Ruling examined the product's manufacturing process and ingredients, noting that the product is not merely groundnut oil cake but a compounded feed made from multiple ingredients. The product's characteristics and usage as animal feed were considered, leading to the conclusion that it falls under Chapter Heading 2309 of the GST Tariff as "Preparation of a kind used in Animal Feeding," specifically under sub-heading 23099010.

Issue 2: Applicability of GST Exemption

The Authority referred to Notification No. 1/2017 - Central Tax (Rate) and Notification No. 2/2017 - Integrated Tax (Rate), which provide for the interpretation and classification of goods under the Customs Tariff Act, 1975. Chapter Heading 2309 covers products used in animal feeding that have lost the essential characteristics of the original material due to processing.

The Authority concluded that the applicant's product, "Cattle Feed in Cake Form," is correctly classified under Chapter Heading 23099010 as "Compounded animal feed." This classification aligns with the product’s intended use and the detailed manufacturing process provided by the applicant. Consequently, the product is exempt from GST under Sl.No. 102 of the relevant notifications for both intra-state and interstate supplies.

Ruling:

The Authority ruled that the product "Cattle Feed in Cake Form" manufactured by the applicant is classifiable under Chapter Heading 23099010. It stands exempted from GST as per Sl.No. 102 of Notification No. 2/2017-Central Tax (Rate) dated 28th June 2017, Notification No.II(2)/CTR/532(d-5)/2017 dated 29th June 2017, and Notification No. 2/2017-Integrated Tax (Rate) dated 28th June 2017, as amended.