The Authority for Advance Ruling (AAR) bench of Karnataka ruled that a 5% Goods and Services Tax (GST) is applicable to Bio-Phosphate.
The applicant, M/s Criyagen Agri & Biotech Private Limited stated that they have been manufacturing Agro inputs like organic manures, Biofertilisers and Fertilisers since 2008 and they are launching their new product “Bio-Phosphate”.
Despite not having included their argument in the application, the applicant claimed during a personal hearing that their product ought to be classified under HSN code 3101 0099 and as a result, attract 5% GST.
Amita Ganapathy, company and also Authorised personal hearing proceedings application. Senior Scientist & employee of the applicant Representative of the applicant appeared for and reiterated the facts narrated in their application.
The bench observed that the impugned product is said to have been manufactured/prepared by blending the carrier material Rock Phosphate with Phosphate Solubilizing Fungal and Bacterial cultures supplemented with essential mineral nutrients, which are crop nutrients and fertilizers.
Further, Phosphorus-solubilizing bacteria are commonly used plant probiotics that promote plant development by converting insoluble phosphorus into soluble Phosphorus that is easily absorbed and used by roots.
It was observed by the members Dr M. P. Ravi Prasad and Kiran Reddy T. that heading 3103 covers Minerals or chemical fertilisers of phosphatic in nature. Further heading 3103 10 00 covers superphosphates and heading 3103 90 00 covers other phosphatic fertilisers.
Moreover, in the instant case, the impugned product contains Rock Phosphate and thus it is phosphatic in nature. Further, it is not a superphosphate and thus it merits classification under the heading 3103 90 00.
The authority has stated 5% GST on the Bio-Phosphate was based on the terms of Sl.No. 182B of Schedule I to the Notification No. 1/2017-Central Tax (Rate) date 28.06.2017, as amended.
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