Agricultural Manually hand-operated Dressing, Coating, and Treating Drum attracts 12% GST: AAAR [Read Order]

The two-member bench of Gujarat Appellate Authority of Advance Ruling (AAAR) has held that the manually operated seed dressing, coating, and treating drum which is covered under HSN Code 8436 of Customs Tariff Act attracts 12% GST.

The appellant, M/s Adarsh Plant Protect Ltd applied for an Advance Ruling to determine the HSN and applicable tax on "Agricultural manually hand-operated seed dressing, coating, and treating drum".

The appellant contended that the manually operated machines are used by the farmer in agriculture to cover, coat, and treat chemicals on seeds before sowing which falls under HSN 8201 and attracts a nil rate of GST.

The AAR viewed that the appellant's product was not a hand tool; rather, it was a machine used for seed dressing, coating, and treating the seed with chemicals and ruled that seed dressing, coating, and treating drum machines are classified as HSN 843 68090 tariff items which are liable to GST at the rate of 12% GST.

It was evident that chapters 8201 to 8205 include tools which are used by hand and 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 and closed with one hand.

Shri Atish Patel (MD) and Shri Ketan Maheshwari (CFO) appeared for the appellant and contended that the manually operated seed dressing drum should be classified under HSN 8201, which attracts a nil rate of GST. Manually operated agriculture or animal-driven tools are classified under HSN 8437, which attracts a 5% rate of GST where the machinery for cleaning, sorting, or grading of seed or grain is included.

A Coram comprising of Shri. Vivek Ranjan and Shri Milind Toravane have observed that, as per HSN 8436, other agricultural machinery includes seed dusting machines consisting of a revolving drum in which the seeds are coated with insecticidal or fungicidal powders.

The authority while rejecting the appeal, held that the appellant's product manually hand-operated seed dressing, coating and treating drum is covered within the description provided under the HSN Code 8436 and upheld the ruling of the Gujarat Authority for Advance Ruling.

To Read the full text of the Order CLICK HERE

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