2020 (6) TMI 487 - AAR - GST

Classification of goods - rate of GST - Psyllium Husk Powder - taxable at 5% or 18%? - Notification No. 01/2017 -Central Tax (Rate) dated 28.06.2017 - HELD THAT - Psyllium Husk Powder is covered under Serial No. 73 of Schedule-I of the said Notification attracting GST @ 5% - Psyllium is a plant whose part (seed/ husk) is crushed in powder form to prepare a pharmaceutical product. The entry 1211 of Notification explicitly matches the preparation/ process undertaken by the applicant. Psyllium/lsabgol is a plant of which parts are used to prepare powder to be used as pharmaceutical product. As the Plants and parts of plants (including seeds and fruits), whether frozen or dried, cut or not cut, crushed or not crushed and powdered or not powdered falls under S. No. 73 of Schedule-I of Notification No. 1/2017 Central Tax (Rate) dated 28.06.2017 (as amended) and attracts GST @ 5%. The classification and rate of GST of the Psyllium/lsabgol and its seed has also been clarified by CBIC clarification in December, 2017.

Summary

Issues Involved: Classification and applicable GST rate on Psyllium Husk Powder.

1. Submission and Interpretation of the Applicant:
The applicant, a manufacturer of Psyllium Husk Powder, seeks clarification on its classification and the applicable GST rate. They argue that their product is not expressly defined in the relevant GST notifications and should thus attract an 18% GST rate under the residual entry (Serial No. 453) of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, which covers goods not specified in Schedules I, II, IV, V, or VI.

2. Questions on Which the Advance Ruling is Sought:
The applicant requests a ruling on whether the GST rate applicable to Psyllium Husk Powder is 5% or 18%.

3. Personal Hearing:
During the personal hearing, the applicant reiterated their submissions and requested an early resolution.

4. Comments of the Jurisdictional Officer:
The jurisdictional officer disagreed with the applicant's classification, asserting that Psyllium Husk falls under HSN 12119032 and not under any residual entry.

5. Findings, Analysis & Conclusion:
The authority examined the nature of Psyllium and its classification under Chapter 12 of the CGST Tariff, 2017, which deals with "Oil seeds and oleaginous fruits, miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder." Psyllium Husk Powder is classified under HSN 12119032. The relevant notification (No. 01/2017-Central Tax (Rate) dated 28.06.2017) lists Psyllium Husk Powder under Serial No. 73 of Schedule-I, attracting a GST rate of 5% (SGST 2.5% + CGST 2.5%).

The authority referenced CBIC clarifications from December 2017, which confirmed that Psyllium Husk falls under HSN 1211 and attracts a 5% GST rate. Despite the applicant's argument for an 18% GST rate under a residual entry, the authority emphasized the Principle of Specificity, which dictates that a specific product entry cannot be overridden by a general or residual entry, as upheld by the Supreme Court in Dunlop India Ltd. and Madras Rubber Factory Ltd. v. UOI & Others.

6. Ruling:
Psyllium Husk Powder, derived from the Psyllium Plant or its parts, is classifiable under HSN 12119032 and attracts a GST rate of 5% (CGST 2.5% + SGST 2.5%) as per Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 (as amended).