5% GST on Ammonium Sulphate supplied for direct use as Fertilizers or used in Manufacturing of Complex Fertilizers for Agricultural use: AAR [Read Order]

GST - Ammonium Sulphate - fertilizers - agricultural use - AAR - Taxscan

The Gujarat Authority of Advance Ruling (AAR) held that 5% GST on Ammonium Sulphate supplied for direct use as fertilizers or used in the manufacturing of complex fertilizers for agricultural use.

The applicant, Willmart Enterprise supplied fertilisers for different types of customers having both the purposes i.e. agriculture purpose and/or non-agriculture; that the proprietor has set an unwritten business policy to demand from their prospective customers the NOC as issued to them by the Directorate of Agriculture to determine whether the product has agriculture use or non-agriculture use and upon receipt of the NOC, the applicant goes through the same to confirm whether the NOC is specifically issued for the product and validity of the same; that the applicant also obtains the declaration from the prospective customers declaring the use of the product as ‘agriculture’ and once both i.e. NOC and declaration are received, this sales transaction is treated by the applicant as the sale of the product for the agriculture purpose. The NOC from the Directorate of Agriculture as referred herein above is required to be obtained by those enterprises/units who are intending to sell or offer for sales or carrying on the business of selling agricultural fertilizer.

The applicant has sought the advance ruling on the issue of whether the classification of the product under HSN 3102 is correct? Whether the applicant is eligible to avail the benefit of charging concessional rate of GST of 5% on outward supply of its product for the purpose of agriculture and Rate of GST on outward supply of product for the purpose of non-agriculture should be charged at the rate of 18%.

The Coram of Arun Saxena and Arun Richard ruled that ‘Ammonium Sulphate’ is classifiable at HSN 310221. GST of 5% is leviable on Ammonium Sulphate supplied for direct use as fertilizers or used in the manufacturing of complex fertilizers for agricultural use (soil or crop fertilizers). GST of 18% is leviable on Ammonium Sulphate supply for other than fertilizer use.

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