2018 (6) TMI 465 - AAR - GST

Classification of goods - Rate of Tax - Agricultural Soil testing Minilab and its Reagent Refills - whether classifiable under exempted goods falling under Tariff heading 8201 as notified vide N/N. 2/20172017 - Central Tax (Rate), dt.28-06-2017 or otherwise? Held that - A combined reading of chapter notes and description of goods covered under Tariff heading 8201 reveals that the goods covered under this heading are basically hand tools of a kind used in agriculture, horticulture or forestry - Whereas the main function of the Soil testing minilab is todetermine all the important soil parameters i.e., soil pH, EC, Organic Carbon, available nitrogen, phosphorus, potassium, Sulphur and micronutrients like Zinc, boron and iron and hence cannot be classified as a hand tool along with the items of description given under Tariff heading 8201 such as Agricultural implements manually operated or animal driven - Soil Testing minilab is basically an instrument/apparatus for physical or chemical analysis of the soil and for determining various parameters viz., soil pH, EC, Organic Carbon, available nitrogen, phosphorus, potassium, Sulphur and micronutrients like Zinc, boron and iron. The Instruments and Apparatus for physical or chemical analysis are classifiable under GST Tariff heading 9027 - By applying the General rules for interpretation of Customs Tariff as applicable to GST Tariff, as the functions being performed by Soil testing minilab are similar to that of an Instrument/Apparatus for physical or chemical analysis, the Soil testing minilab is correctly classifiable under heading 9027 of the GST Tariff. Ruling - Agricultural Soil testing Minilab and its Reagent Refills are classifiable under Tariff heading 9027 of the GST Tariff and tax rate applicable is 9% CGST 9% SGST.

Summary

Issues: Classification of "Agricultural Soil testing Minilab and its Reagent Refills" under GST Tariff

Analysis:
1. The applicant sought an advance ruling on the Rate of Tax for "Agricultural Soil testing Minilab and its Reagent Refills" under Section 97(1) of TGST Act, 2017.
2. The applicant presented the interpretation of law and relevant facts, along with the application fee payment evidence.
3. During the personal hearing, the applicant's authorized representative explained the features and functions of the "Mridaparikshak Minilab" developed by ICAR for soil testing.
4. The applicant argued that the goods should be classified as exempted under Tariff heading 8201 based on notifications issued by the Central Board of Excise and Customs and the Government of Telangana.
5. The applicant relied on previous judgments to support their classification as agricultural implements.
6. The key issue was to determine the classification of the "soil testing minilab" and its "Reagent refills" under the relevant Tariff heading.
7. The chapter notes and description of goods under Tariff heading 8201 were examined to understand the scope of classification.
8. The chapter notes for Chapter 82 were analyzed to ascertain if the goods in question fall under the category of hand tools used in agriculture, horticulture, or forestry.
9. A comparison was made between the functions of the "Soil testing minilab" and the items listed under Tariff heading 8201 to determine the appropriate classification.
10. The "Soil testing minilab" was found to be an instrument for analyzing soil parameters, which does not align with the hand tools specified under Tariff heading 8201.
11. The product brochure and functions of the minilab indicated its use as an instrument for soil analysis rather than a hand tool.
12. Instruments and apparatus for chemical analysis are classified under Tariff heading 9027, which includes pH meters and wet-chemical analyzers.
13. Applying the rules for interpretation of Customs Tariff to GST Tariff, the "Soil testing minilab" was deemed correctly classifiable under heading 9027 for instruments/apparatus for chemical analysis.
14. The "Refilling Reagent" being a part of the minilab was also classified under heading 9027 as an accessory for use with instruments of the same category.
15. The ruling concluded that "Agricultural Soil testing Minilab and its Reagent Refills" are classifiable under Tariff heading 9027 with a tax rate of 9% CGST + 9% SGST.
16. The application by M/s. Nagarjuna Agro Chemicals Private Limited was disposed of accordingly based on the ruling provided.