2022 (1) TMI 748 - AAR - GST

Classification of goods - product Rodent Feed - classified under the HSN 2309 90 10 or not - exemption under the Serial Number 102 of N/N. 02/2017 - HELD THAT - This exemption notification has grouped various tariff items under a single Serial no. 102 and has given an inclusive description for the same. Further neither the specific word rodent feed nor the general words such as animal feed are used. In this connection a reference need to be made to the law declared by the Hon ble Supreme Court of India in the case of N.D.P. NAMBOODRIPAD VERSUS UNION OF INDIA ORS. 2004 (4) TMI 583 - SUPREME COURT wherein it has been held that the word includes can be used to connote a specific meaning i.e., as in means and includes or comprises or consists of . Therefore the description is exhaustive, and no further extension of the words used in the Notification can be made to include any other word. The Hon ble Apex Court of India in the case of STATE OF GUJARAT OTHERS VERSUS ESSAR OIL LIMITED AND ANOTHER 2012 (1) TMI 47 - SUPREME COURT held that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, which must be construed strictly, and in case of any doubt or ambiguity, the benefit must go to the State - The Hon ble Apex court of India in the case of COMMISSIONER OF CENTRAL EXCISE, SURAT-I VERSUS M/S FAVOURITE INDUSTRIES 2012 (4) TMI 65 - SUPREME COURT held that an exemption notification must be interpreted in light of the words employed by it and not on any other basis and there cannot be any addition or subtraction from the words used in the exemption notification as it requires strict interpretation by the Courts. The wordings of the exemption notification have to be given its natural meaning when the wordings are simple, clear and unambiguous. Therefore in the absence of any specific reference to other animal feed or rodent feed, this exemption notification cannot be extended to the commodity dealt by the applicant.

Summary

Issues:
1. Classification of rodent feed under HSN 2309 90 10.
2. Applicability of HSN for the specified product.
3. Exemption status and taxability of rodent feed under Notification no. 02/2017.

Issue 1: Classification of rodent feed under HSN 2309 90 10

The applicant, a bio-technology company, sought clarification on whether rodent feed falls under HSN 2309 90 10 and is eligible for exemption under Notification no. 02/2017. The Authority analyzed the exemption notification, which grouped various items under Serial no. 102, providing an inclusive description without specific mention of rodent feed. Referring to legal precedents, the Authority emphasized strict interpretation of exemption provisions. As rodent feed was not explicitly included, the Authority ruled that it could be classified under HSN 2309 90 10 but was not covered by the exemption.

Issue 2: Applicability of HSN for the specified product

The Authority reiterated the classification of rodent feed under HSN 2309 90 10 based on the applicant's submissions and the exemption notification's provisions. However, as the product did not fall within the specific exemption category, the ruling did not provide a separate HSN applicable for the specified product, maintaining the classification under HSN 2309 90 10.

Issue 3: Exemption status and taxability of rodent feed under Notification no. 02/2017

The applicant contended that rodent feed should be exempt under Serial no. 102 of Notification no. 02/2017, which listed various feed categories eligible for exemption. The Authority, guided by legal principles, highlighted the need for a strict interpretation of exemption notifications. Citing relevant court cases, the Authority emphasized that exemptions must be construed strictly, with no extension beyond the notification's explicit terms. Consequently, the ruling clarified that rodent feed was taxable under Sl.No.453 of Schedule III of Notification no. 01/2017 at a rate of 9% CGST and SGST each, as it was not covered by the specific exemption provision.

In conclusion, the Advance Ruling Authority addressed the classification, applicability, and taxability of rodent feed under the relevant GST notifications, emphasizing strict interpretation and adherence to the explicit terms of exemption provisions. The ruling provided clarity on the classification of rodent feed under HSN 2309 90 10, its exemption status, and the applicable tax rates, ensuring compliance with the GST regulations.