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TMI Blog2020 (9) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that mycorrhiza/endomycorrhiza are naturally available microorganisms which belongs to fungus group and these microorganisms are not free living but lives in symbiotic association with the plant root; that more than 90% of the living plants are naturally colonized by Mycorrhiza; that these organisms help in mineral nutrient absorption, moisture absorption etc; that the product when applied, would germinate to attach itself to the roots of the plant and would effectively add a secondary root system to enhance the water and nutrient absorption capacity of the plant, hence based on the Fertiliser (control) Order 1985, the products are treated as biofertilizers; that the goods are rightly classifiable under Chapter 3103 which covers bio fertilizers. They have reproduced the said entry in Customs Tariff as under: 3101 ANIMAL OR VEGETABLE FERTILISERS, WHETHER OR NOT MIXED TOGETHER OR CHEMICALLY TREATED; FERTILISERS PRODUCED BY THE MIXING OR CHEMICAL TREATMENT OF ANIMAL OR VEGETABLE PRODUCTS 3101 00 - Animal or vegetable fertilisers, whether or not mixed together or chemically treated; fertilisers produced by the mixing or chemical treatment of animal or vegetable products : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, plant surfaces or soil colonizes the rhizosphere or the interior of the plant and promote growth by increasing the supply or availability of primary nutrients to the host plant; Bio-fertilizers add nutrients through the natural processes of nitrogen fixation, solubilising phosphorus and stimulating plant growth through the synthesis of growth-promoting substances; that the authority has held that Bio Fertilizer are covered under Chapter 3101 and falls under Sr.No.182 of Schedule-I. The applicant has submitted the end use of the bio fertilizers manufactured by them as under: (a) Rhizo Myx Soluble- increases nutrient and water absorption capability, improves plant disease resistance, improves stress tolerance, increases feeder route development and function. (b) Rhizo MYCO soluble- increased nutrient and water absorption, improved stress' tolerance, increased root volume, greater insurance for survivability of root-balled trees. The products are bio-fertilisers used for plant growth. 4. The applicant has submitted that the Hon'ble Supreme Court has upheld the decision of CESTAT in the case of Northern Minerals ltd. v/s Commissioner reported in 2001 (131) ELT.355(Tri.) in Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izoMyx and Rhizomyco are classifiable under : Chapter 3101- All goods i.e. animal or vegetable fertilisers or organic fertilisers put up in unit containers and bearing a brand name-Entry No.182 of Schedule-I of rate of GST on Goods comprising of 'List of Goods at 2.5% Rate' or Chapter 3002-Animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; toxins, cultures of micro-organisms (excluding yeasts) and similar products- Entry 61 of Schedule-II of rate of GST on Goods, comprising of 'List of Goods at 6% Rate' 9. In short, we are required to decide whether the products RhizoMyx and Rhizomyco, manufactured and supplied by the applicant fall under Sub-heading 3101 or 3002. Before deciding the classification of the above products, we need to find out whether the products of the applicant i.e. Rhyzomyx and Rhyzomyco are biofertilisers as stated by the applicant. For that we are required to find out the definition of biofertilisers: * As per dictionary, biofertilisers are defined as a substance which contains living micro-organism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as biofertilizers. The applicant has also submitted that the product under discussion is not a chemical product but is comprised of live spores and propagules of endomycorrhizal fungi and that inert materials like humic acid etc. are manures in general sense and therefore merit classification under Chapter 3101. As per dictionary, definitions of mycorrhiza and Endomycorrhiza are as under: (a) Mycorrhiza: A fungus which grows in association with the roots of a plant in a symbiotic or mildly pathogenic relationship. (b) Endomycorrhiza: A form of mycorrhiza in which the hyphae of the fungus penetrate the root cells. Further, brief of the details as per the brochures submitted by the applicant in respect of their products is as under: (a) Rhizomyco: Rhizomyco is uniquely formulated with Novozymes proprietary blend of microbes and growth promoting substances containing eighteen species of endo and ectomycorrhizae in a soluble/injectable form to provide broad spectrum application for increased nutrient update and enhances root systems. It increases nutrient and water absorption, improves plant disease resistance, greatly extends the root system and improves stress to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore transplanting. Second application:drenching spray, soil drenching, fertigation * Apply approximately 15 days after sowing or first application. * 250 grams per hectare. (iii) Application on Tree crops(fruit crops, plantation crops etc.) First application: soil drenching or fertigation. * At the time of fertilizer application. * 250 grams per hectare: 0 to 6 year old crop. * 500 grams per hectare>6 year old crop. Second application: soil drenching or fertigation * 40 to 45 days after first application. * 250 grams per hectare: 0 to 6 year old crop. * 500 grams per hectare>6 year old crop. From the above details submitted by the applicant and comparing the same to the definitions and benefits of biofertilisers described in para 9 above, it can be seen that the above products manufactured and supplied by the applicant are indeed biofertilisers. 11. In order to determine the classification and tax liability on the supply of the products RhizoMyx and Rhizomyco by the applicant and to decide as to whether these products are correctly classifiable under Sub-heading no.3101 or 3002 as requested by the applicant, we will be required to refer to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs or organic fertilisers put up in Thus as per Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, the above sub-heading covers animal fertilisers or vegetable fertilisers or organic fertilisers. For the purpose of clarity, we will have to refer to the definitions of animal fertilisers, organic fertilisers and organic fertilisers. As per dictionary, Animal fertilisers and organic fertilisers are defined as under: (i) Animal fertiliser: Gardeners use the word manure to mean a fertilizer made from animal waste. When you spread manure on your vegetable garden, you're feeding the soil and plants with nutrients that (ii) encourage growth. The manure itself might be, for example, a combination of cow dung and straw, or slightly decomposed chicken waste. (iii) Organic fertilizers are fertilizers derived from animal matter, animal excreta (manure), human excreta and vegetable matter (e.g. compost and crop residues). Naturally occurring organic fertilizers include animal wastes from meat processing, peat, manure, slurry, and guano. Since the definition of vegetable fertilisers is not available anywhere, hence it would have to be construed in generic terms. In generic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-heading 3101, we need to find out whether the same is covered under sub-heading 3002 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). Sub-heading 3002 reads as under: 3002 HUMAN BLOOD; ANIMAL BLOOD PREPARED FOR THERAPEUTIC,PROPHYLACTIC OR DIAGNOSTIC USES;ANTISERA, OTHER BLOOD FRACTIONS AND IMMUNOLOGICAL PRODUCTS,WHETHER OR NOT MODIFIED OR OBTAINED BY MEANS OFBIOTECHNOLOGICAL PROCESSES;VACCINES,TOXINS, CULTURES OFMICRO-ORGANISMS (EXCLUDINGYEASTS) AND SIMILAR PRODUCTS ; 3002 10 - Antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes: --- Antisera; 3002 10 11 ---- For diptheria 3002 10 12 ---- For tetanus 3002 10 13 ---- For rabies 3002 10 14 ---- For snake venom 3002 10 19 ---- Other 3002 10 20 --- Hemoglobin blood globulins and serum globulins --- Other : 3002 10 91 ---- Of human origin 3002 10 99 ---- Other 3002 20 - Vaccines for human medicine : --- Single vaccines : 3002 20 11 ---- For cholera and typhoid. 3002 20 12 ---- For hepatitis. 3002 20 13 ---- For tetanus. 3002 20 14 ---- For polio. 3002 20 15 ---- For tuberculosis. 3002 20 1 ..... 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