2019 (4) TMI 306 - AAR - GST

Classification of goods - Plastic Seedling tray - part of agriculture machinery or not - Classified under Chapter 8201 or otherwise? - applicability of N/N. 2/2017-Central Tax dt 28.06.2017 as amended - input tax credit of tax paid or deemed to have been paid - liability of GST - Held that - The product in question is Seedling Trays made of fully of plastic i.e. polypropylene and hence it cannot be classified under chapter 82 or anywhere under Section XV and accordingly it cannot be classified under 8201 as Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry - the tray itself is not a part of any machine or used with any machine or electronically driven nor is it an accessory of any agricultural machinery. Rice planting machinery do not need these seedling trays to function and hence cannot be classified as parts or accessories of agricultural machinery. The subject goods are rightly classifiable under CTH 39269099 as articles of plastics not elsewhere specified. Applicability of the exemption under Notification No. 2/2017 - Held that - The exemption stipulated therein applies to goods classifiable under CTH 8201 only. The product in hand is not classified under CTH 8201 and therefore the exemption is not available to the product in hand. The product in hand being classified under CTH 3926, is covered by entry at SL No. 111 of Schedule III of Notification No 01/2017-C.T. (Rate) dated 28.06.2017 as amended and SL No 111 of Schedule III of G.O. (Ms) No. 62 dated 29.06.2017 no. II (2)/CTR/532(d-4) / 2017, which covers Other articles of plastics and articles of other materials of headings 3901 to 3914 other than bangles of plastic, plastic beads and feeding bottles and is taxable @ 9% CGST and 9% SGST. Admissibility of Input Tax Credit of tax paid - Held that - The applicant has not put forth any specifics requiring a ruling. However, having held that the supply of 'Agricultural Seedling Trays', are taxable the input tax credit is available subject to fulfilment of all the conditions of Section 16 and Section 17 of CGST /TNGST Act, 2017 and the relevant rules governing the admissibility of credit of tax paid on Inputs.

Summary

Issues:
1. Classification of the product.
2. Applicability of a notification issued under the provisions of this Act.
3. Admissibility of input tax credit of tax paid or deemed to have been paid.
4. Determination of the liability to pay tax.

Detailed Analysis:
1. Classification of the product:
The applicant sought an Advance Ruling regarding the classification of 'Plastic Seedling tray' under the GST Act. The product in question, Agricultural Seedling Trays made of polypropylene, was claimed to be exempted under Chapter 8201. However, the Authority ruled that the trays are rightly classifiable under CTH 39269099 as articles of plastics not elsewhere specified, not falling under Chapter 8201. The ruling was supported by previous similar judgments.

2. Applicability of a notification issued under the provisions of this Act:
The Authority determined that the exemption under Notification No. 2/2017 applied to goods classifiable under CTH 8201 only. Since the product was classified under CTH 3926, it was covered by specific entries in the notification, making it taxable at 9% CGST and 9% SGST. The exemption was deemed not applicable to the product due to its classification.

3. Admissibility of input tax credit of tax paid or deemed to have been paid:
Regarding the admissibility of Input Tax Credit, the Authority stated that the supply of 'Agricultural Seedling Trays' was taxable, making the input tax credit available subject to fulfilling all conditions of Section 16 and Section 17 of the CGST / TNGST Act, 2017, and relevant rules governing the admissibility of credit of tax paid on Inputs.

4. Determination of the liability to pay tax:
In conclusion, the Authority ruled that the Agricultural Seedling Trays made of polypropylene were classifiable under CTH 39269099, taxable at 9% CGST and 9% SGST. The credit of Input tax paid was deemed available, subject to fulfilling the specified conditions under the relevant Acts. The ruling provided a comprehensive analysis of the product classification, tax liability, and input tax credit admissibility based on the provisions of the GST Act and relevant notifications.