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2023 (2) TMI 876 - AAR - GSTClassification of supply - exempt supply or not - bouquets made with dry parts of plants, foliage, flower buds, grasses and branches of plant which are dried, bleached, dyed and coloured for decorative and ornamental purposes and sold with plastic foil packaging - to be classified under HSN code 06049000 or not - applicability of Sl. No. 34 of Notification No. 02/2017-CT (Rates) dated 28/06/2017. HELD THAT - The applicant s final product i.e. Bouquet, made with Dried and/or Dyed flower buds will be classifiable as Other under Tariff Item No. 06039000. Heading 0604 deals with Foliage, Branches and Other Parts of Plants, without Flowers or Flower Buds, and Grasses, Mosses and Lichens, Being Goods of a Kind Suitable for Bouquets or for Ornamental Purposes, Fresh, Dried, Dyed, Bleached, Impregnated or Otherwise Prepared (emphasis supplied). Therefore, the applicant s final product i.e. Bouquet, made with Dried and/or Dyed parts of plants, foliage, grasses and branches of plant, will be classifiable as Other under Tariff Item No. 06049000. It is found that vide serial number 34 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017, as amended corresponding West Bengal state Notification No. 1126 F.T. dated 28.06.2017 , the whole Chapter 6 which deals with Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage is exempted from payment of tax. Hence, supply of goods by the applicant under Tariff Item Nos. 06039000 and 06049900, whether individually or in combination, is also exempt from payment of tax.
Issues: Classification of goods under GST, Exempt supply under HSN code, Applicability of NIL GST, Interpretation of Notification No. 02/2017-CT
Issue 1: Classification of Goods under GST The applicant, a company engaged in manufacturing decorative bouquets made from dried parts of plants, sought an advance ruling on the classification of these goods under the GST Act. The Authority observed that the applicant's final product, bouquets made with dried and/or dyed flower buds, falls under Tariff Item No. 06039000. Similarly, bouquets made with dried and/or dyed parts of plants, foliage, grasses, and branches of plants are classified under Tariff Item No. 06049000. The Authority relied on Chapter 6 of the GST Tariff, which deals with live trees, plants, cut flowers, and ornamental foliage, to determine the classification of the applicant's products. Issue 2: Exempt Supply under HSN Code The applicant claimed that their supply of bouquets made from dry parts of plants should be considered an exempt supply under the GST Act. The Authority noted that serial number 34 of Notification No. 02/2017-CT (Rates) dated 28/06/2017, which exempts the entire Chapter 6 dealing with live trees, plants, cut flowers, and ornamental foliage from tax payment, applies to the applicant's goods classified under Tariff Item Nos. 06039000 and 06049900. Therefore, the supply of these goods by the applicant is indeed exempt from payment of tax. Issue 3: Applicability of NIL GST The applicant also inquired about the applicability of NIL (0%) GST on bouquets made from dry parts of plants. The Authority confirmed that the supply of bouquets made with dry parts of plants, foliage, flower buds, grasses, and branches of plants, which are dried, bleached, dyed, and colored for decorative purposes and sold with plastic foil packaging, falls under the exempt category as per the aforementioned notification. Therefore, NIL GST is applicable to these goods. Issue 4: Interpretation of Notification No. 02/2017-CT The applicant raised questions regarding the coverage of Sl. No. 34 of Notification No. 02/2017-CT (Rates) dated 28/06/2017 on the bouquets made from dry parts of plants. The Authority clarified that the said notification, which exempts Chapter 6 goods from tax payment, includes the applicant's products classified under Tariff Item Nos. 06039000 and 06049900. Therefore, the bouquets made by the applicant are considered exempt from GST, aligning with the provisions of the notification. In conclusion, the Authority ruled that bouquets made with dry parts of plants for decorative purposes and sold with plastic foil packaging are classified under specific Tariff Items, qualify as exempt supplies under the GST Act, and are subject to NIL GST as per the relevant notification.
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