The Andhra Pradesh Authority for Advance Ruling ( AAR ) has ruled that the Mangala Borosan and Mangala G1 are classifiable under 2833 29 90 attracted 18% Goods and Services Tax ( GST ).
The applicant M/s Zuari Farmhub is engaged in manufacturing, trading and marketing of chemical fertilisers, seeds, pesticides and supply of allied services, all used in agricultural services.
The applicant sought advance ruling on the following:
1. Whether the products Mangala Borosan and Mangala Gl are Classifiable under Chapter Heading 3105 as Fertilisers?
2. If the answer to the question is no. 1 is negative, what would be appropriate? Classification of the said micronutrient Fertilisers?
The applicant submitted that the Products in question (Mangala Borosan and Mangala Gl) are nothing but Fertilisers. The most appropriate classification of thc Fertilisers will be under chapter 31 of thc First Schedule to Thc Customs Tariff Act, 1975. It was added that resorting to classification under Chapter 38 which provides for classification of miscellaneous chemical products, and includes preparations of chemical industry or allied industries, would be inappropriate.
The proceedings of Personal Hearing were conducted on 03.08.2023, for which the authorized representative, R. Kushal Choudhary, attended and reiterated the submissions already made.
The AAR bench meticulously examined the nature of the subject product and distinguished it from micronutrient blends, emphasising its composition primarily consisting of inorganic chemicals. Contrary to categorization under micronutrients specified in Schedule 1, Part (A) of the Fertilizer Control Order, 1985, the product aligned more closely with Tariff Item 28332990, supported by scholarly literature highlighting its sulphate-centric essence.
This classification decision, reinforced by thorough scholarly scrutiny, acknowledged the product’s clear deviation from micronutrient blends, instead emphasising its inorganic chemical makeup. Such precision in classification not only reflects the product’s intrinsic characteristics but also ensures regulatory compliance.
In summary, the product’s placement under Tariff Item 28332990 is substantiated by its composition, notably its sulphate content, as elucidated in relevant literature. By recognizing the absence of micronutrient blends and the prevalence of inorganic chemicals, particularly sulphates, this classification provides a nuanced understanding of the product’s nature and facilitates adherence to regulatory standards.
Thus, the AAR bench of B. Laxmi Narayan (Central Tax) and K. Ravi Sankar ( State Tax ) ruled that the products Mangala Borosan and Mangala G1 are classifiable under 2833 29 90 (under schedule 3) attracting 18% GST and not under Chapter heading 3105 as fertilisers.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
