2022 (3) TMI 677 - AAR - GST

Exemption from GST - sale of produces Distillery Wet Grain Soluble (DWGS) and Distillery Dry Grain Soluble (DDGS) Cattle feed undertaken by the applicant - applicability of serial no 102 of Notification No. 02/2017 Central Tax (Rate) dated 28 June 2017 - HELD THAT - It is observed that the Notification No. 01/2017 classifies brewing or distillery dregs and waste at S.No.104 under tariff item 2303 and the rate applicable is 5% on these products - It is further seen that the chapter headings of the tariff items which qualify as cattle feed at the S.No.102 of Notification No. 02/2017 do not include the HSN 2303 . Thus S.No.102 of Notification No. 02/2017 specifically excludes brewing or distillery dregs and waste . As seen from the averments submitted by the applicant the Distillery Wet Grain Soluble ( DWGS ) and Distillery Dry Grain Soluble ( DDGS ) are clearly falling under brewing or distillery dregs and waste and therefore under tariff item HSN No. 2303 . Hence these are excluded from the exemption Notification No. 02/2017.

Summary

Issues:
1. Application filed under Section 97(1) of TGST Act, 2017 for Advance Ruling.
2. Classification of Distillery Wet Grain Soluble (DWGS) and Distillery Dry Grain Soluble (DDGS) as cattle feed for GST exemption.

Analysis:
1. The applicant, a distillery, sought clarification on the tax exemption status of their by-products, DWGS and DDGS, which are used as cattle feed. The application was admitted after payment of the requisite fee and with no objections from the jurisdictional officer.

2. The main contention revolved around whether the products qualified for exemption under serial no 102 of Notification No. 02/2017. The applicant argued that DWGS and DDGS were solely used as cattle feed and should be exempt from GST. They relied on the end-user test for their claim.

3. During the personal hearing, the authorized representatives reiterated the products' usage as cattle feed and emphasized their eligibility for exemption under Sl. No. 102 of Notification No. 02/2017. They requested the AAR to decide based on their detailed submissions.

4. The AAR's discussion focused on the classification of the products under the relevant notifications. It was noted that while brewing or distillery waste was taxed at 5% under S. No. 104 of Notification No. 01/2017, the products in question did not fall under the exemption category of S. No. 102 of Notification No. 02/2017.

5. The ruling clarified that DWGS and DDGS were not covered under the exemption of Notification No. 02/2017 but were taxable at 5% under S. No. 104 of Notification No. 01/2017. Therefore, the sale of these products as cattle feed did not qualify for GST exemption.