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TMI Blog2024 (5) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 dated 18th July 2022. Therefore, for all purposes and intention Entry of rate of 12% would govern the product mango pulp , which was not specifically included in Entry No. 30A, which provides for mango sliced, dried. The impugned circular dated 3rd August 2022 only clarifies the insertion of Entry No. 16 vide Notification No. 6/2022 and therefore, the argument and contention raised by the petitioner that by the impugned circular, the GST rate of 12% sought to be introduced is without any basis. For mango pulp , the GST rate was 12% from 1st July 2017 as per Notification No. 1/2017 - The mango pulp was not included in the Entry No. 30A of the Schedule II, which came into effect by Notification No. 34/2017. Therefore, there was a need for clarification by the GST Council in its 47th meeting held on 28th June 2022 to clarify that the third category of mango in HSN 0804 other than fresh and dried mangoes are required to be clarified to be taxed at the rate of 12%. The impugned Notification and circular are not in the nature of amending the tax rate with increasing the tax rate with retrospective effect. In fact, they are clarificatory so far as the product mango pulp is concerned, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncil. The petitioner is, therefore, liable to pay GST at the rate of 12% as per Entry no. 16 from 01.07.2017 and not 5% as per Entry No. 30A, which provides for mangoes sliced, dried only. The contention of the petitioners that there was an amendment to the rate Notification with effect from 18th July 2022 is not tenable. As such the Notification is only clarificatory and would apply with effect from 1st July 2017 as per Notification No. 1/2017. It is true that Section 9 of the CGST Act does not grant power to amend the rate Notification - The contention of the petitioner that as per HSN 0804, mango pulp would be covered by mangoes as per General Chapter Note, which includes fruits and dates, and therefore, only mangoes other than fresh mangoes is required to considered and as mango pulp is not a fresh mango and would be covered by entry No. 30A mango sliced, dried is not tenable in view of clarification made by the GST Council in its 47th meeting, wherein it is clearly mentioned that only mangoes sliced, dried would attract GST at 5% and remaining mango would be attracted GST at 12%. Therefore, the Notification No. 6/2022 is only inserting the word mango other than mango sliced, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng rates of tax in respect of goods as well as exemption are based on Harmonized System of Nomenclature (HSN) as notified by the World Customs Organization. Each entry has the corresponding HSN mentioned against it. The Heading for mangoes in HSN (HS Code 0804) segregates them into only two broad categories: (1) fresh and (2) dried. [9] In the 22nd GST Council Meeting held on 6th October 2017, it was decided to reduce the rate of tax on sliced and dried mangoes from 12% to 5% in view of mango flour was taxable at 5%. [10] On the basis of the decision of the GST Council, dried mangoes were removed from Schedule II containing goods attracting tax at the rate of 12% and instead a new Entry 30A was inserted in Schedule I as mangoes sliced, dried , which attracted tax rate at 5% GST vide Notification No. 34/2017 dated 13th October 2017. [11] The petitioners, therefore, discharged tax liability at the rate of 5% on supply of mango pulp as mango pulp supplied by the petitioners was nothing, but pulp form of sliced mangoes. On inquiry made by the petitioner on CBEC Mitra Helpdesk with regard to rate of tax applicable to mango pulp , an E-mail was sent on 19th February 2018 that mango pulp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 168 of the CGST Act to be ultra-vires Section 9 of the CGST Act read with Entry No. 30A of Schedule I of Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017 as well as Entry No. 51 of Notification No. 2/2017-Central Tax (Rate) dated 28.6.2017 as well as manifestly arbitrary and violating Article 14 of the Constitution of India; B. This Hon ble may be pleased to hold and declare that mango pulp was classifiable under Entry 30A of Schedule I of Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017 attracting tax at the rate of 2.5% CGST + 2.5% SGST upto 18.7.2022; C. Without prejudice to the above and in the alternative, in any case it may please be declared that tax cannot be imposed on mango pulp beyond the tax rate of 6% CGST + 6% SGST even for the period prior to 18.7.2022; D. This Hon ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order quashing and setting aside impugned show cause notice dated 14.2.2022 (annexed at Annexure G); .. [17] Learned advocate Mr. Uchit Sheth for the petitioners submitted that HSN 0804 includes mangoes, fresh or dried. Explanatory notes to HSN clearly provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t HSN needs to be followed when tariff is based on HSN code is no more res integra. Reliance was made upon the following decisions of the Hon ble Supreme Court: (a) Collector of Central Excise vs. Woodcraft Products Ltd reported in 1995 (77) ELT 23 (SC) (b) Commissioner of Customs and Central Excise vs. D. L. Steels reported in 2022 SCC online SC 863. [17.4] It was further submitted that residuary entry can be resorted to only as a last resort even if a liberal interpretation of specific entry cannot cover the goods in question. Reliance was made upon the the following decisions of the Hon ble Supreme Court: (a) State of Maharashtra vs. Bradma of India Ltd reported in 2005 (2) SCC 669. (b) Mauri Yeast India Pvt Ltd vs. State of Uttar Pradesh reported in 2008 (5) SCC 680. [17.5] It was submitted that reliance placed on the customs tariff and the Explanation to the GST rate Notification by the respondent is wholly misplaced and the customs tariff contained sub-classification of HSN 0804 upto 8 digits and consequently, there was tariff item for mango pulp . It was however submitted that the GST tariff has adopted classification only upto 4 digits with there being no reference to tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts made in the affidavit-in-reply filed on behalf of the respondents Nos. 1, 2 and 3: 8. W.r.t. to para 15 and 16, it is stated that GST Council is the Constitutional body to decide issues relating to GST. The recommendation regarding GST Rates of the mango pulp in the 47th GST Council meeting convened on 28th and 29th June 2022 is as under: The GST rate on all forms of mango under CTH 0804, including mango pulp (other than mangoes sliced, dried) attract GST at 12%. Entry is also being amended to make this amply clear. Raw or fresh mangoes continue to be exempt. The rate of tax for the specified goods under GST has been prescribed under Schedules I to VI and tax rate notifications issued by the government of India. In exercise of the powers conferred by sub-section (1) of section 9 and sub-section (5) of section 15 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council made the amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 1/2017-Central Tax (Rate), dated the 28th June 2017 via notification no 06/2022 Central Tax (rates) dated 13th July 2022. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n: (ii) Tariff item , sub-heading heading and Chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. Therefore, while the Rate Notification under GST provides the rate of tax on goods and services, in order to interpret these Rate Notifications for the purposes of levy of GST, one has to read the same along with the First Schedule (including the Section and Chapter Notes and General Explanatory Notes) of the Customs Tariff Act, 1975 ( Tariff ). Each Section and Chapter under the Tariff is accompanied by notes known as 'Section Notes and Chapter Notes, Classification is to be determined Ne only on the basis of the description of the heading read with relevant section or Chapter notes. Coming to the product Mango Pulp/Puree , it finds a place under chapter heading no.0804 5040 of the Customs Tariff Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Schedules I to VI and tax rate notifications issued by the government of India and the same are required to be levied accordingly. 14. W.r.t. to Ground A to F, since it s a policy matter, respondent no 1 and 3 have no comments to offer as same will be the domain of CBIC. The respondent reiterates what is stated in the preceding paragraphs Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh . The above entry exempts only fresh mangoes from being eligible for tax. It is worthwhile to mention in this context, that there is no dispute with the classification of the product under chapter 8 but the description under entry no. 31 of 0804 enlists only fresh Mangoes, (v) The tariff rate changes brought about by Notification No. 35/2017 Integrated Tax (Rate) dated: 13.10.2017. amending notification No. 1/2017-Integrated Tax (Rate), dated: 28.06.2017 added the following entries: In the said notification-(A) In Schedule 1-5%, After S. No. 30 and the entries relating thereto, the following serial number and the entries shall be inserted, namely: 30A 0804 Mangoes sliced, dried ; In Schedule II-12%, (i) In S. No. 16, in column (3), for the words and brackets Dates (soft o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. [21] Section 11(1) of the CGST ACT empowers the Government to grant exemption. Section 11(1) reads as under: 11. Power to grant Exemption. (1) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by notification, exempt generally, either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification. [22] The Government has issued Notification No. 1/2017 dated 28th June 2017 in exercise of powers conferred by Sections 9 and 11 of the CGST Act prescribing different rates of tax. The Notification No. 2/2017 was issued providing a list of exempted goods based on Harmonized System of Nomenclature (HSN). [23] Chapter 8 of HSN is concerning Edible Fruits and Nuts. The General Chapter Note of the said Chapter states that Fruits and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the GST rate on all forms of dried mangoes (other than sliced and dried mangoes), falling under heading 0804, including mango pulp, was always meant to be at the rate of 12%. 4.3. Accordingly, it is hereby clarified that mangoes, fresh falling under heading 0804 are exempt; Mangoes, sliced and dried, falling under 0804 are chargeable to a concessional rate of 5%; while all other forms of dried mango, including Mango pulp, attract GST at the rate of 12%. To bring absolute clarity, the relevant entry at S. No. 16 of Schedule-II of notification no. 1/2017-Central Tax (Rate), dated 28th June, 2017, has been amended vide notification No. 6/2022-Central Tax (Rate), dated the 13th July, 2022. 4.4. Fresh mangoes, falling under heading 0804, continue to remain exempt from GST [S. No. 51 of notification No. 2/2017-Central Tax (Rate), dated the 28th June, 2017]. [29] From the perusal of above clarification issued by the impugned circular dated 3rd August 2022, it explains that Notification No. 6/2022 only clarifies that mango pulp attracts GST rate at 12%. Therefore, the contention raised by the petitioner is that such Notification cannot be applied retrospectively in view of various decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis. For mango pulp , the GST rate was 12% from 1st July 2017 as per Notification No. 1/2017. It is only the petitioner, who interpreted the Notification No. 34/2017 pursuant to the recommendations of the GST Council in its 27th meeting to reduce the GST rate from 12% to 5% on the product mango sliced, dried. The mango pulp was not included in the Entry No. 30A of the Schedule II, which came into effect by Notification No. 34/2017. Therefore, there was a need for clarification by the GST Council in its 47th meeting held on 28th June 2022 to clarify that the third category of mango in HSN 0804 other than fresh and dried mangoes are required to be clarified to be taxed at the rate of 12%. [33] In view of the above, the impugned Notification and circular are not in the nature of amending the tax rate with increasing the tax rate with retrospective effect. In fact, they are clarificatory so far as the product mango pulp is concerned, as admittedly, Entry No. 30A does not include the mango pulp . [34] Therefore, the stand of the respondents that mango pulp would fall in the residuary category as the same was not included either in the Notification No. 1/2017 or covered by the Entry No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be taxed at the rate of 12% only as the same would not be falling in Entry No. 30A as mango sliced or dried. [39] In view of the foregoing reasons, there is no retrospective amendment of Entry No. 16, but the same is clarificatory only inserted by Notification No. 6/2022 and the impugned circular dated 3rd August 2022 where Entry No. 16 in Schedule II has included mangoes other than sliced, dried which includes mango pulp. Therefore rate can be said to be reduced from 12% to 5% only on mango sliced, dried and rate of 12% would continue to be applied to mangoes other than mangoes sliced, dried as per notification no. 6/22 as per the clarification of the GST Council as per minutes of the 47 th meeting. [40] On the basis of the recommendations of the GST Council, Notification No. 6/2022 reads as under: C. in Schedule II 6%, - (i) against S. No. 16, in column (3), after the word guavas , the words and brackets, mangoes (other than mangoes sliced, dried) shall be inserted; [41] To insert words mangoes (other than mangoes sliced, dried) after the word guavas , would be clarificatory meaning thereby, mangoes (other than mango sliced, dried) to be considered as part of in Entry No. 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dates, and therefore, only mangoes other than fresh mangoes is required to considered and as mango pulp is not a fresh mango and would be covered by entry No. 30A mango sliced, dried is not tenable in view of clarification made by the GST Council in its 47th meeting, wherein it is clearly mentioned that only mangoes sliced, dried would attract GST at 5% and remaining mango would be attracted GST at 12%. Therefore, the Notification No. 6/2022 is only inserting the word mango other than mango sliced, dried so as to clarify that all mangoes would fall in the same category other than mango sliced, dried . [44] With regard to the contention of the petitioner that the CBIC Board cannot resile from its opinion, it is to be noted that E-mail dated 19th October 2018 is only in response to the query raised by the petitioner without there being any analysis or the clarification from the GST Council. Once the GST Council has clarified that the mangoes (other than mangoes sliced, dried) would attract 12% GST and would not attract reduced rate at 5% as recommended by the GST Council in its 22nd meeting, therefore the petitioners would be governed by the GST rate at 12%. The contention of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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