2020 (7) TMI 407 - AAR - GST

Classification of goods - Tamarind Seed - taxable at Nil Rate under HSN Code 1209 (Forest Trees Seed) or not - HELD THAT - The appellant at the time of Personal Hearing admitted that the tamarind seed/kernel as traded by them is sold to Millers and meant for commercial /industrial purpose. Moreover no certificate or any other document certifying the tamarind kernel/ seed meant for sowing purpose is submitted by the applicant. Coming to the classification issue, CBIC in its FAQs published on HSN code and GST Rates dt 03.08.2017 gave a clarification that tamarind kernel falls under HSN Code 1207. As per the powers vested in the Governor of Andhra Pradesh vide section 28-G of the Andhra Pradesh Forest Act 1967, (Act 1 of 1967) in its application to the scheduled Areas in the Andhra Pradesh made A.P. preservation of Private Forest Rules, 1978 - Chinta is the Local name of Tamarind. Therefore, as per the Indian forest Act, 1927 and the Andhra Pradesh forest Act, 1967, Tamarind Tree is declared as forest tree. According to the Andhra Pradesh preservation of Private forest rules, 1978, a Product or a tree specified in the schedules to the Rules, whether those are produced in forest area or other than forest area, all rules and regulations are applicable as if those are forest products. Tamarind trees are forest trees. Seeds of Tamarind trees are nothing but seeds of forest trees which Tamarind seed is classified under HSN code 1207 and attracts tax rate of 5%.

Summary

Issues Involved:
1. Interpretation of the tax rate applicability on Tamarind Seed under HSN Code 1209.

Analysis:
The case involved an application filed by M/s Sri Venkata Vijaya Durga Traders seeking an Advance Ruling on whether Tamarind Seed attracts a Nil Rate under HSN Code 1209. The applicant contended that Tamarind Seed should be classified as seeds of fruit trees under the HSN Code, attracting a Nil rate of tax. The applicant relied on various legal provisions and interpretations to support their claim, including the HSN description, the Indian Forest Act, and the Andhra Pradesh Forest Act. They argued that Tamarind trees are forest trees, and hence, Tamarind Seed should be considered as seeds of forest trees under HSN Code 1209, attracting a Nil rate of tax.

The Authority examined the submissions made by the applicant and found that the basic issue was whether Tamarind Seed falls under the Nil Rate of Tax under HSN Code 1209. During the Personal Hearing, it was revealed that the Tamarind Seed traded by the applicant was meant for commercial/industrial purposes, not for sowing. The Authority referred to CBIC FAQs, which classified Tamarind kernel under HSN Code 1207, attracting a tax rate of 5%. The Authority also highlighted that Tamarind was treated as a forest product by the Government of India and Andhra Pradesh, further supporting its classification under HSN Code 1207.

Based on the analysis and findings, the Authority ruled that the Tamarind Seed falls under Schedule - I as per Sl. No. 70 of Chapter/Heading/Sub-Heading/Tariff Item 1207. Therefore, the applicable tax rate for Tamarind Seed is 5% (2.5% under Central tax and 2.5% State tax). The ruling was made under Section 98 of the Central Goods and Services Tax Act, 2017, and the Andhra Pradesh Goods and Services Tax Act, 2017.

In conclusion, the judgment clarified the tax classification and rate applicability for Tamarind Seed, emphasizing its categorization under HSN Code 1207 and the corresponding tax rate of 5%. The ruling provided a definitive interpretation based on legal provisions and factual analysis presented during the proceedings.