The Tamil Nadu Authority for Advance Ruling (AAR) has held that 5% of Goods and Service Tax (GST) would be applicable to supply of dried Coconut manufactured and supplied by EMS COCO.
The applicant EMS COCOS, is a partnership concern, engaged in the activities of Manufacturing and Trading of Coconut, Copra and coconut shells, registered under the GST with GSTIN:33AAIFE2739G1ZL. The Applicant has sought Advance Ruling as to whether the dried coconuts (shelled or peeled) used for human consumption would be classified under Chapter 8, HSN 0801, on which rate of tax was ‘nil’.
Vivek Sharma, on behalf of the applicant submitted that coconut was procured from farmers in Kerala and Tamil Nādu. He also submitted that they had no oil extraction facility and that they supplied copra for human consumption and oil extraction. Further the applicant had already applied a 5% tax rate for both milling copra and edible oils.
The concerned officer, Coimbatore Commissionerate submitted that the copra dried under sun in the mill backyard was dry fruit or edible food fit for human consumption and could not be classified under heading 0801.
The Authority for Advance Ruling of R. Gopala swami (Additional Commissioner) and N. Usha (Joint Commissioner) observing the finance ministry circular 163/1923 GST held that,
“The whole unbroken kernel could be taken out of the shell only when it converts to copra. The Applicant takes the copra cut into half, sun dries and segregates manually based on the round shape of copra, free of dirt/dust and sends it as edible copra and the rest of copra which are irregularly shaped, dusty are sent to oil milling units. But as the Circular clearly states, Copra is classified under heading 1203 irrespective of use.”
As the impugned goods of the Applicant was only Copra and the same would be classified under Heading 1203 the authority held that GST rate of 5% would be applicable by entry at SL.No. 66 of Schedule I of 1/2017-Central Taxes (Rate) dated 28.06.2017.
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