2019 (3) TMI 839 - AAR - GST

Classification of goods - rate of GST - AMI (Anaerobic Microbial Inoculums) - Held that - The product - Anaerobic Microbial Inoculums (AMI) i.e. Animal Dung is nothing but an organic manure i.e. organic fertiliser which is generally used in Bio-toilets set up in Railways coaches, known as DRDO inoculums bacteria . As per the nature and usage, the products i.e. Anaerobic Microbial Inoculums (AMI) manufactured by the applicant will be classified under HSN code 3101 of the GST Tariff Act - On going through the HSN code 3101 of the GST Tariff, it is found that the products i.e. Anaerobic Microbial Inoculums (AMI) manufactured by the applicant will be classified under sub-heading 31010099 and accordingly, the GST will be leviable @ 5% on supply of these products as on date. The products i.e. Anaerobic Microbial Inoculums (AMI) will be classified under chapter sub-heading 31010099 of the heading 3101 of the GST Tariff and accordingly, the supply of these products will attract GST@ 5% CGST @ 2.5% SGST @ 2.5% as on date.

Summary

Issues:
1. Application seeking advance ruling on HSN Code and applicable tax rate for Anaerobic Microbial Inoculums (AMI) under GST.

Analysis:
1. The application was filed under Section 97 of the CGST/SGST Act, 2017 by a company seeking a ruling on the HSN Code and applicable tax rate for AMI under GST.
2. An advance ruling under GST pertains to decisions on matters specified in the Act related to the supply of goods or services undertaken or proposed by the applicant.
3. The applicant sought a ruling on the classification and GST rate applicable to the supply of AMI.
4. During the hearing, it was explained that AMI is used in bio-toilet technology and as organic manure, with its production process involving cattle dung and specific bacteria inoculums.
5. The nature and usage of AMI were detailed, emphasizing its role in bio-toilet technology and as organic manure, especially in Indian Railways.
6. It was established that AMI falls under HSN code 3101 of the GST Tariff Act, attracting a GST rate of 5% on its supply.
7. The ruling confirmed that AMI is classified under sub-heading 31010099 of HSN code 3101, subject to a GST rate of 5% (CGST @ 2.5% + SGST @ 2.5%).

In conclusion, the Authority for Advance Rulings, Uttarakhand, provided a detailed analysis and ruling on the classification and applicable tax rate for Anaerobic Microbial Inoculums (AMI) under the GST regime, clarifying its categorization under the HSN code and the corresponding GST rate of 5% for its supply.