12% GST chargeable on Biofertilizers namely ‘Rhyzomyx’ and ‘Rhyzomyco’: AAR [Read Order]

AAR Gujarat - AAR - GST - Rhyzomyx - Rhyzomyco - Taxscan

The Gujarat Authority of Advance Ruling (AAR) ruled that 12% GST is chargeable on ‘Rhyzomyx’ and ‘Rhyzomyco’.

The applicant, M/s. Novozymes South Asia Pvt. Ltd. is engaged in the manufacture and taxable supply of biofertilizers namely Rhizomyx and Rhyizomyco. They have stated that mycorrhiza & endomycorrhiza are active ingredients in these products, the other items being humic acids, sea water kelp extracts etc. are inert materials; that as per Section 2(aa) of the Fertiliser (Control) Order, 1985.

The applicant submits that the product is not a chemical product but consists of live spores and propagules of endomycorrhizal fungi; that inert materials like humic acid etc. are manures in general sense and therefore merit classification under Chapter 3101.

The applicant sought advance ruling on the issue whether Whether the bio agricultural products i.e. Rhizomyx and Rhizomyco are classifiable under Chapter 3101 or Chapter 3002.

As per 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 ‘List of Goods at 2.5% Rate’.

As per 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 microorganisms (excluding yeasts) and similar products- Entry 61 of Schedule-II of rate of GST on Goods, comprising of ‘List of Goods at 6% Rate’

The two-member bench of Sanjay Saxena and Mohit Agarwal ruled that the products ‘Rhyzomyx’ and ‘Rhyzomyco’ were manufactured and supplied by M/s. Novozymes South Asia Pvt. Ltd., is covered under Entry Sr. No.61 of Schedule-II of Notification No.1/2017-Central Tax (Rate) dated June 28, 2017 of the CGST Act, 2017 on which rate of GST chargeable is 12%  i.e. 6% SGST and 6% CGST.

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