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TMI Blog2023 (7) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... ture , since no new product emerges post the crushing of tobacco refuse mixing it with natural clay water, we find it appropriate that the product is classifiable under CTH 2401 as unmanufactured tobacco; tobacco refuse - It is held that the supply of applicant of 'kandi rave is classifiable under 24013000. The applicant has not disclosed the fact that as to whether they are using brand name for their product. The applicant was asked to provide additional submissions on the issue. The applicant, vide his additional submission received on 10.5.2023, has informed the they are not affixing any name or label on the packing, in which the packed goods are sold to their customers in 30-35 kgs bags - The photographs adduced by the applicant depicts that the goods are being sold without any brand name, labelling etc. In view of the foregoing, since the applicant proposes to supply/supplies the said kandi rave to their customers in 30-35 kg bags, without any brand name, labeling, etc, it is held that the applicant would be/is liable to pay GST 28% [14 % CGST and 14 % SGST] in terms of notification No. 1/2017-CT(Rate), Sr. No. 13, Schedule IV. - MILIND KAVATKAR AND AMIT KUMAR MISHRA, ME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct was used by tobacco manufacturers and that as per their belief no compensation cess, is payable on to their product. Discussion and findings 8. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 9. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made during the course of personal hearing and the departmental comments received in the matter. We have also considered the issue involved, the relevant facts the applicant s submission/interpretation of law in respect of question on which the advance ruling is sought. 10. Under the GST regime, classification of goods is done using the General Rules of Interpretation of the first schedule of the Customs Tariff Act, 1975, including the section chapter notes and the General Explanatory Notes to the HSN of the first schedule of CTA, 1975 in terms of Explanation 1 to notification No. 1/2017-Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appended to this notification, that shall be levied on the intra-State supplies or inter-State supplies of such goods, the description of which is specified in the corresponding entry in column (3) and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedule. SCHEDULE S.No. Chapter/ Heading/ Sub-heading/ Tariff item Description of Goods Rate of goods services tax compensation cess 5. 2401 Unmanufactured tobacco (without lime tube) - bearing a brand name 71% 6. 2401 Unmanufactured tobacco (with lime tube) - bearing a brand name 65% 7. 2401 30 00 Tobacco refuse, bearing a brand name 61% (3) For the purposes of this notification, the phrase brand name means brand name or trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person. Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term manufacturer shall be construed accordingly; (D) HSN notes of chapter 24 [relevant extracts] 24.01 Unmanufactured tobacco; tobacco refuse. 2401.10 - Tobacco, hot stemmed/shipped 2401.20 - Tobacco, partly or wholly stemmed/stripped 2401.30 - Tobacco refuse This beading covers ( 1) Unmanufactured tobacco in the form of whole plants or leaves in the natural state or as cured or fermented leaves, whole or stemmed/stripped, trimmed or untrimmed, broken or cut (including pieces cut to shape, but not tobacco ready for smoking). Tobacco leaves, blended, stemmed/stripped and cased ( sauced or liquored ) with a liquid of appropriate composition mainly in order to prevent mould and drying and also to preserve the flavour are also covered in this heading. (2) Tobacco refuse , e.g., waste resulting from the manipulation of tobacco leaves, or from the manufacture of tobacco products (stalks, stems, midribs, trimmings, dust, etc.). 12. The applicant has, as is evident, sought a ruling on classification of his supply i.e. Kandi Rave . The process unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cigar and cheroot kg. 30% - 24012080 --- Tobacco for manufacture of hookah tobacco kg. 30% - 24012090 --- Other kg. 30% - 24013000 - Tobacco refuse kg. 30% - 16. We find that HSN notes for tariff item 2401, reproduced supra, covers unmanufactured tobacco in the form of whole plants/leaves in natural state, cured or fermented leaves, whole, stemmed/stripped, trimmed/semi trimmed broken/cut, blended cased with a liquid of appropriate composition mainly to prevent drying and to preserve the flavour. It also covers tobacco refuse eg waste resulting from the manipulation of tobacco leaves, or from the manufacture of tobacco products [stalks, stems, midribs, trimmings, dust, etc). Though the applicant has undertaken the process of crushing tobacco refuse and thereafter mixing it with natural clay water, in terms of the HSN notes, we find that it still remains an unmanufactured tobacco. This is more so because even in terms of section 2(72) of the CGST Act, 2017, which defines manufacture , since no new product emerges post the crushing of tobacco refuse mixing it with natural clay water, we find it appropriate that the product is classifiable under CTH 2401 as unmanufactured tobacco; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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