2020 (9) TMI 588 - AAR - GST

Classification of goods - HSN goods - rate of GST - Sprayer pumps (manually operated) and stoves - case of applicant is that the said items are used manually for only agriculture purpose so the rate of tax should be NIL. What sprayer pumps and stoves are? - HELD THAT - On going through the sample invoices submitted by the applicant, it is found that they are (i) classifying Sprayer pumps (manually operated) under Sub-heading 8424 (sample invoice No.440 dated 15.03.2018) and (ii) classifying stoves under Sub-heading 7321 (sample invoice No.T/082/18-19 dated 11.06.2018) and paying GST of 12% (6% SGST 6% CGST) during their supply. Further, when the representative of the applicant was asked during the course of personal hearing about the fuel used for operating the stoves manufactured by the applicant, he stated that wood was used as fuel in the said stoves. Whether the products manufactured by the applicant have been correctly classified and whether the tax paid by them is correct or otherwise? - Notification No.01/2017-Central Tax (Rate) dated 28.06.2017? - HELD THAT - It is observed that there is no specific entry for Sprayer pumps . However, looking at the definition of sprayer pumps as well as to the uses of the product mentioned in the pamphlets as well as in the submission of the applicant, wherein it is mentioned that it is used as a sprayer on the agricultural field crops, it would fall under Sub-heading 8424 - It is found that the Sprayer pumps are specifically covered under Tariff item no.84248100 (agricultural or horticultural) based on their use. It is observed that vide Notification No 06/2018-Central Tax (Rate) dated 24.01.2018, the word mechanical sprayers has been inserted vide Entry No.195B in Schedule-II of Notification No 01/2017-Central Tax(Rate) dated 28.06.2017, whereas Entry No.325 in Schedule-III of the said notification has been amended to the effect that the words (other than sprinklers; drip irrigation systems including laterals; mechanical sprayer; nozzles for drip irrigation equipment or nozzles for sprinklers have replaced the earlier entry other than Nozzles for drip irrigation equipment or nozzles for sprinklers . It can therefore be concluded that the product sprayer pumps falling under Tariff item No.84248100 would be classified under Entry No.325 of Schedule-III of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 up to 24.01.2018 and the GST applicable during this period would be 18%. However, with effect from 25.01.2018, the said product would be classified under Entry No.195B of Schedule-II of the said notification and the GST applicable would be 12%. Stoves - HELD THAT - The stoves manufactured and supplied by the applicant would be classified under Tariff item No.73218990 - The product stoves falling under Tariff item No.73218990 would be classified under Entry at 183 of Schedule-II of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and the GST applicable would be 12%.

Issues Involved:
1. Classification and applicable GST rate for manually operated sprayer pumps.
2. Classification and applicable GST rate for stoves.
3. Applicability of exemption from GST for the aforementioned products.

Issue-wise Detailed Analysis:

1. Classification and Applicable GST Rate for Manually Operated Sprayer Pumps:

The applicant, M/s. Adarsh Plant Protect Ltd., manufactures sprayer pumps, which they classify under Chapter-84 with HSN code 8424. They argue that these pumps, used solely for agricultural purposes, should attract a NIL tax rate. However, the authority examined the definition and use of sprayer pumps, confirming that they are mechanical devices used to spray pesticides on crops. The sprayer pumps are classified under Sub-heading 8424, specifically Tariff item 84248100, which covers mechanical appliances for spraying liquids or powders in agricultural or horticultural settings.

The applicable GST rate for these sprayer pumps was initially 18% (9% SGST + 9% CGST) as per Entry No. 325 in Schedule-III of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. However, following amendments through subsequent notifications, the GST rate was reduced to 12% (6% SGST + 6% CGST) effective from 25.01.2018, as per Entry No. 195B in Schedule-II of the same notification.

2. Classification and Applicable GST Rate for Stoves:

The applicant also manufactures stoves, which they classify under Chapter-73 with HSN code 7321. These stoves, used for mixing pesticides, are classified under Sub-heading 7321, specifically Tariff item 73218990, which includes non-electric domestic appliances of iron or steel.

The applicable GST rate for these stoves is 12% (6% SGST + 6% CGST) as per Entry No. 183 in Schedule-II of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.

3. Applicability of Exemption from GST for the Aforementioned Products:

The applicant contended that their products, being manually operated and used for agricultural purposes, should be exempt from GST. However, upon reviewing the provisions and entries of the exemption Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, the authority found that neither the sprayer pumps nor the stoves manufactured by the applicant are listed under any of the exemption entries. Therefore, these products do not qualify for a NIL tax rate.

Ruling:

1. Sprayer Pumps: The manually operated sprayer pumps manufactured by M/s. Adarsh Plant Protect Ltd. are classified under Tariff item 84248100. The applicable GST rate is 18% (9% SGST + 9% CGST) up to 24.01.2018 and 12% (6% SGST + 6% CGST) from 25.01.2018 onwards.

2. Stoves: The stoves manufactured by M/s. Adarsh Plant Protect Ltd. are classified under Tariff item 73218990. The applicable GST rate is 12% (6% SGST + 6% CGST).

3. Exemption: The products do not qualify for any exemption under Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017.

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