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2019 (10) TMI 794 - AAR - GSTRate of GST - Areca Palm Leaf Plates - HELD THAT - The areca leaf plates are made out of a part of the areca plant and hence would be a leaf product and hence gets covered under entry no. 198A of Notification No.01/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 27/2017 - Central Tax (Rate) dated 22.09.2017 and hence liable to tax at 2.5% under the CGST Act and also at 2.5% under the Karnataka GST Act, 2017.
Issues:
Rate of tax applicable under GST on Areca Palm Leaf Plates Analysis: The applicant, a Private Limited Company, sought an advance ruling on the tax rate applicable to Areca Palm Leaf Plates under GST. The applicant provided details on the manufacturing process of these plates and their significance as eco-friendly alternatives to plastic and thermocol products. The applicant believed that these plates should be classified under HSN code 0604, attracting a Nil rate of GST, similar to the treatment under previous tax laws. Upon reviewing the submissions and conducting a detailed examination, the Authority found that Areca Palm Leaf plates are manufactured from the pericarnium of Areca leaves. These plates are not suitable for bouquets or ornamental purposes, as indicated by the description of HSN Code 0604. The Authority also considered various entries in the tax notifications to determine the appropriate tax rate for these products. The Authority analyzed entry no. 198A of Notification No.01/2017 - Central Tax (Rate) and concluded that Areca Leaf plates, being made from a part of the Areca plant, qualify as leaf products under this entry. Therefore, the Authority ruled that Areca Leaf plates made from pericarnium of Areca leaves are liable to tax at 2.5% under the CGST Act and the Karnataka GST Act from 22.09.2017. In summary, the Authority determined the tax rate applicable to Areca Palm Leaf Plates under GST based on their composition and usage. The ruling clarified that these plates are taxable at 2.5% under both the CGST Act and the Karnataka GST Act, effective from a specified date in 2017.
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