In re Alligo Agrovet Private Limited (GST AAR Maharashtra)
Question: – Classification of goods and GST rate applicability in the case of goods manufactured by us (list enclosed) ?
Answer:- Products namely AUTUS, SJ-NINJ A, SJ-ERASER, OPRAX, TELNAR, VK’s NEMO AND STRESSOUT are classifiable under HSN Code-3808 and liable to GST @18% (SGST CGST 9% as per Notification-1 of 2017-CT (Rate) dated 28.06.2017 each respectively. The product SHYAM SAMRUDDHI is an organic fertilizer classifiable under HSN-3105 and liable to GST @5% as per Sr. No.182D of Schedule-I of Notification-1 of 2017-CT (Rate) dated 28.06.2017
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by M/s. ALLIGO AGROVET PRIVATE LIMITED , the applicant, seeking an advance ruling in respect of the following question.
1. Classification of goods and GST rate applicability in the case of goods manufactured by us (list enclosed)
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to “GST Act” would means CGST Act / MGST Act.
3. FACTS AND CONTENTION – AS PER THE APPLICANT
The goods manufactured and supplied by us cover under Organic Fertilizers and the same have been certified by the INDOCERT, BIOCERT (as institute / authorities) appointed under National programme for organic Production, Department of Commerce, New Delhi.
The Products mentioned in enclosed list contain Animal or Seaweed Plant excreta, Nitrogenous, Potasic Fertilizers and Micronutrients which are required for the growth and development of the plant and also used to increases overall yield and quality of plant produce. Therefore, according to us products correctly classify under HSN 3101 or 3105.
Additional submissions:
[A] PRODUCTS SUBMITTED FOR CLARIFICATION REGARDING CLASSIFICATION IS ORGANIC CERTIFIED PRODUCTS AS PER STANDARDS OF (NPOP) NATIONAL PROGRAMME FOR ORGANIC PRODUCTION.
1. Our product for which seeking clarification is certified Organic Products under the NATIONAL PROGRAMME FOR ORGANIC PRODUCTION (NPOP) GOVERNED UNDER (APEDA-AGRICULTURE AND PROCESSED FOOD PRODUCTS) THE MINISTRY OF COMMERECE & INDUSTRY GOVT. OF INDIA.
The Government of India has implemented the National Programme for Organic Production (NPOP). The national programme involves the accreditation programme for Certification Bodies, standards for organic production, promotion of organic farming etc.
The NPOP standards for production and accreditation system have been recognized by IFOAM (International Federation Of Organic Agro Movements), European Commission and Switzerland for unprocessed plant products as equivalent to their country standards, similarly, USDA has recognized NPOP conformity assessment procedures of accreditation as equivalent to that of US. With these recognitions, Indian organic products duly certified by the accredited certification bodies of India are accepted by the importing countries.
2. Our products certified after verification and inspection done by the INDOCERT and BIOCERT authorities appointed under NPOP, and audited, renewed annually. Since last 5 (Five) years we were following the Organic principals of farm Inputs as per NPOP. Copy of certificate issued by the INDOCERT and BIOCERT submitted for your perusal.
[Copy of Certificate enclosed Aniterure -A].
3. The list of products declared in Annexure-1 as per standard of NPOP which can be used for formulation and manufacturing of agricultural Inputs are enclosed herewith for your ready reference.
(Copy of Annexure-I enclosed Annexure – A1]
[B] RESIDUE ANALYSIS REPORT
We intend to submit that, when our products were tested by the Govt. laboratory of National Horticultural Research and Development Foundation, Nashik we did not find any ingredients of Fungicides, Pesticides or insecticides and Plant growth Regulators. Copy of products sample Test Report enclosed for your ready reference.
We can also submit products samples, for further testing or verification to the Hon’ble authorities.
(Copy of Analysis Report enclosed Annexure.- B]
[C] OUR PRODUCT DOES NOT FALL UNDER THE CATEGORY OF PESTICIDE, Our product is not falling under the category of Pesticides. They are having fertilizing elements that promote healthy plant growth and plant immunity,
The products manufactured by us have Organic Extracts of Animal & Plant Origin. For e.g. products have Marine-Sea Weed Extract, Plant Extracts etc.
[D] CLASSIFICATION OF PRODUCTS
1. Fertilisers as Per FCO 1985.
Definition of Fertiliser as per FCO 1985 – (h) “fertiliser” means any substance used or intended to be used as a fertiliser of the soil and/or crop and specified in Part A of Schedule I and includes a mixture of fertilizer and special mixture of fertilisers provisional fertiliser, customised fertilizer, Bio-fertilizers specified in Schedule III and Organic fertilizers specified in Schedule IV
Definition of fertilizer under FCO has a functional definition and a list specific definition; Under FCO, Fertilizer should satisfy two conditions which are joined by the conjunction and’ in above definitions.
(i) It should be a substance used or intended to be used as a fertilizer of the soil and/or crop (basic functional definition); and
(ii) It should be specified in either Part A of Schedule-I or Schedule-Ill or Schedule-IV. (Out of the fertilizers, which qualify the functional definition, only the fertilizers which are listed in schedule shall be subjected to controls under FCO).
Therefore, the products manufactured by us are organic fertilisers by functions and also having fertilizing elements. But as clarified above they won’t be governed under FCO as well as Insecticides Act, 1968.
The organic products not covered under FCO are governed as per NPOP Norms and certified accordingly.
[Copy of definition offertilisers as per FCO enclosed Annexure-C ]
2. FCO is not relevant to classify products as fertilisers, CBIC Circular No. 1022/10/2016-CX dated 06th April 2016.
a) As stated in above Para FCO are not relevant for classification of fertilisers’ products, the same also clarified in CBIC Circular 1022/10/2016-CX dated 06th April 2016. Para 4 of the circular reproduce below for your ready reference;
Para 4. Fertilizers are classified under chapter 31 of the Central Excise Tariff and for this purpose they may interalia be minerals or chemical fertilizers – nitrogenous (CETH 3102), phosphatic (CLTH 3103), potassic (CETH 3104) or fertilizers consisting of two or three of the fertilizing elements 7cmely nitrogen, phosphorous and potassium; other fertilizers (CETH 3105). For the purpose of classification of any product as “other fertilizers”, chapter note 6 of Chapter 31 is relevant which provides that the term “other fertilizers” applies only to products of a kind used as fertilizers and contain, as an essential constituent, at least one of the elements nitrogen, phosphorus or potassium. It is quite clear that for any product to merit classification under CETH 3105 as other fertilizers, the product must have nitrogen or phosphorus or potassium or their combination as an essential constituent providing the essential character to the product. The chemical elements – nitrogen; phosphorus and potassium are also referred as macronutrients or primary fertilizer elements and are required in higher quantity by the plants. 4.2 Any product where the essential elements are not nitrogen or phosphorus or potassium or their mixture would not merit classification under CETH 3105. Further, the specific exclusion of separate chemically, defined compounds as laid down in chapter note 1(i) and in the HSN Explanatory Notes to the heading 3105.90, reinforce the above conclusion. It may also be noted that notifications issued under Fertilizer Control Order are not relevant for deciding classification under the Central Excise Tariff:
3. Our Products do not cover under Plant Growth Regulator.
A) Further in the said Circular, category and type of PGR’s has also been clarified/explained in detailed. Plant Growth Regulators are defined as organic compounds other than nutrients that affect the physiological processes of growth and development in plants when applied in low concentration. These are in the nature of plant hormones and classical of them are auxins, cytokinins, gibberellins (all three promoters) and abscisic acid, ethylene (both inhibitors). A list of some of the PGRs industrially produced in India is enclosed with the Circular by reply of IARI reproduce below for ready reference –
