5% GST on manufacturing and Supply of “Organic Manure”: AAR [Read Order]

GST- Supply Organic Manure - AAR - Taxscan

The Gujarat Authority of Advance Ruling (AAR) ruled that 5% GST on manufacturing and Supply of “Organic Manure”.

The applicant, M/s GB Agro Industries has stated that they are engaged in the manufacture of different types of fertilizers viz. Chemical fertilizers, Organic fertilizers and Bio- fertilizers. At present, they are manufacturing “Organic Manure”, “Bio- fertilizers”, “Granulated Nutrient Mixture” and “Phosphatic Rich Fertilizers”.

At present, they are classifying their products, “Organic Manure”, “Bio- fertilizers” and “Granulated Nutrient Mixture” under Chapter 31 under tariff item 3101 and 3102. Further, they proposed to manufacture “Phosphatic Rich Fertilizers” classifying the same under Chapter 31 in tariff item 3103. But they are not sure whether the classification of the products done by them is correct.

The applicant has sought advance ruling on the classification of “Organic Manure”, “Bio-fertilizers”, “Granulated Nutrient Mixture” and “Phosphatic Rich Fertilizers” manufactured by them and its HSN code.

The coram consisting of Sanjay Saxena and Mohit Aggarwal held that the “Organic Manure” manufactured and supplied by the applicant, classifiable under Chapter sub-heading No.31059090 of the First Schedule to the Customs Tariff Act, 1975. If said products are clearly used as fertilizers, it will be taxable under 5% GST in terms of Sl. No. 182D of Schedule I of Notification No.1/2017-Central Tax (Rate) dated June 28, 2017, as amended.

The AAR further ruled that “Bio-fertilizers” manufactured and supplied by the applicant are classifiable under Chapter sub-heading No.30029030 of the First Schedule to the Customs Tariff Act, 1975 and will be taxable under 12% GST in terms of Sl. No.61 of Schedule-II of the Notification No.1/2017-Central Tax (Rate) dated June 28, 2017, as amended.

“The goods, viz. “Nitrogenous Mixture Fertilizers” manufactured and supplied by the applicant are classifiable under Chapter sub- heading No.31029090 of the First Schedule to the Customs Tariff Act, 1975. If said products are clearly used as fertilizers, it will be taxable under 5% GST in terms of Sl. No. 182A of Schedule I of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, as amended,” the AAR ruled.

Lastly, the AAR said ‘Mixtures of Fertilizers’ manufactured and supplied by the applicant are classifiable under Chapter sub-heading No.31059090 of the First Schedule to the Customs Tariff Act, 1975. If said products are clearly used as fertilizers, it will be taxable under 5% GST in terms of Sl. No. 182D of Schedule I of Notification No.1/2017-Central Tax (Rate) dated June 28, 2017, as amended.

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