2023 (4) TMI 902 - AAR - GST

Classification of goods - rate of GST - HSN Code - Phosphate solubilizing Fungal Bio fertilizers - to be classified under HSN code 3101 0099 or not - HELD THAT - Heading 3103 covers Minerals or chemical fertilisers of phosphatic in nature. Further heading 3103 10 00 covers superphosphates and heading 3103 90 00 covers other phosphatic fertilisers. In the instant case the impugned product contains Rock Phosphate and thus it is a phosphatic in nature. Further it is not a superphosphate and thus it merits classification under heading 3103 90 00. Rate of GST - HELD THAT - Notification No. 1/2017-Central Tax(Rate) dated 28.06.2017, as amended, specifies GST rate of 5% on the impugned product in terms of Sl.No.182B of Schedule I to the said Notification, which covers Mineral or chemical fertilizers, phosphatic, other than those which are clearly not to be used as fertilizers - the product Bio-Phosphate merits classification under HSN code 3103 90 00 and thus are exigible to GST @ 5%, in terms of Sl.No. 182B of Schedule I to the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended.

Summary

Issues Involved:
1. Classification of the product "Bio-Phosphate" under the appropriate HSN code.
2. Applicable GST rate for the product "Bio-Phosphate".

Summary:

Admissibility of the Application:
The application was deemed admissible under Section 97(2)(a) of the CGST Act 2017, as it pertains to the "classification of goods."

Brief Facts of the Case:
The applicant, a manufacturer of Agro inputs, sought an advance ruling on the classification and GST rate for their new product "Bio-Phosphate," a Phosphate Solubilizing Fungal Biofertilizer. The product is registered under the FCO (Fertilizers Control Order 1985) and contains Rock Phosphate blended with Phosphate Solubilizing Fungal and Bacterial cultures.

Applicant's Interpretation of Law:
The applicant contended that their product should be classified under HSN code 3101 0099, attracting GST at 5%.

Authority's Findings & Discussion:
1. Classification of Bio-Phosphate:
- The product is manufactured by blending Rock Phosphate with Phosphate Solubilizing Fungal and Bacterial cultures, supplemented with essential mineral nutrients.
- The applicant's claim for classification under HSN code 3101 0099 was rejected as the product is neither animal nor vegetable-based fertilizer.
- The Deputy Commissioner suggested classification under HSN code 3102 90 90, but this was also rejected as the product does not contain nitrogen or nitrogen compounds.
- The product was found to be phosphatic in nature and thus classified under heading 3103 90 00, which covers other phosphatic fertilizers.

2. Applicable GST Rate:
- As per Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, the product falls under Sl.No.182B of Schedule I, attracting a GST rate of 5%.

Ruling:
The product "Bio-Phosphate" merits classification under HSN code 3103 90 00 and is subject to GST at 5%, in terms of Sl.No. 182B of Schedule I to the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended.