12% GST payable on Seed dressing, Coating, and Treating Drum Machine: AAR [Read Order]

The Gujarat Authority of Advance Ruling (AAR) ruled that 12% GST payable on Seed dressing, coating and treating drum machine.

The applicant, M/s. Adarsh Plant Protected Ltd., has applied for Advance Ruling for determining the HSN and applicable tax on ‘Agricultural manually hand operated Seed dressing , Coating and Treating drum’, submitting that these machines are used by the farmer and are manually operated. It is submitted that the subject machine is used in agriculture to cover, coat and treat chemicals on seeds before sowing and it falls under HSN 8201 and attracts a Nil rate of GST.

It was submitted that other manufacturers of this kind of machines are charging 5% GST under HS code 84371000.

The coram of Members Sanjay Saxena and Arun Richard observed that “Seed dressing, coating and treating drum” machine is classified at HSN 84368090 tariff item and liable to GST at 12%.

The AAR noted that Chapter 82 01 to 8205 includes tools which, apart from certain specified exceptions (e.g. blades for machine saw), are used in the hand. As per HSN they are hand tools which can be used independently in hand. As per HSN notes, these tools almost always have a spring which forces the shafts apart from cutting, and a hook or other fastening so that they can be easily opened or closed with one hand. In cutting they are manipulated with one hand, and they have a very powerful action. The applicant product is not a hand tool rather it is a machine used for seed dressing, coating and treating the seed with chemicals. There is no merit to classify subject goods at HSN 8201.

“As per HSN Notes [ PageNo. XVI-8436-1], the other agricultural machinery includes seed dusting machines usually consisting of one or more hoppers feeding a revolving drum in which the seeds are coated with insecticidal or fungicidal powders. We find that this Chapter Heading is more appropriate for classifying the subject goods as the function of subject goods is also similar wherein the said agricultural machinery has a drum in which seeds are coated and treated with chemicals before sowing. The said Chapter heading makes no different treatment between manual and power driven machines. On examination of HSN 8436, the subheading 843680 covers: ‘other machinery’ and tariff item 84368090 covers ‘other’. We hold that the description of subject goods fit into this Chapter Heading 8436, precisely subheading 843680 and further precisely at Tariff item 84368090,” the AAR noted.

To Read the full text of the Order CLICK HERE

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