In re Rajeev Kumar, Assistant Commissioner Vs. M/s. Elefo Biotech Pvt. Ltd. (GST AAAR Uttarakhand)
The present appeal has been filed by the Assistant commissioner CGST review/concerned officer and asked to pass necessary order holing that the AMI is classifiable under other enzymes of microbial origin’ ‘other’ falling under chapter sub-heading 35079069 of heading 3507 in GST Tariff heading and supply of these products will attract GST@ 18%[CGST@9%SGST @ 9%] as on date or pass any other order as deemed appropriate in the matter. During the course of personal hearing delay condoned and the appeal got registered Members of AAAR hold that Anaerobic Microbial Inoculum (AMI) is to be classified under GST Tariff heading No. 3002 (Sub heading 30029030) on which applicable GST rate is 12% (6% CGST 6% SGST). The Ruling no. 18/2018-19 dated 06.02.2019 passed by AAR. Uttarakhand is accordingly set aside and modified in above terms.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, UTTARAKHAND
The present appeal has been filed under section 100 of the Central Goods and Services Tax Act and Uttarakhand Goods and Service Tax act, 2017 (here in after referred to as “the CGST Act and UKGST Act”) by the concerned officer of the Central Goods and Services Tax, Dehradun (here in after referred to as the “Applicant”) against the Advance ruling order No. 18/2018-19 date 06.02.2019 by the authority for Advance Ruling Uttarakhand in an application made by them.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the UKGST Act are the same except for certain provision. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the corresponding provisions under the UKGST Act.
BRIEF FACTS OF THE CASE
1. In the instant case M/s Elefo Biotech Pvt. Ltd. Plot No. 135, Khasra N. 92, Jhabreda Road, Narsan Kalan, Haridwar, Uttarakhand (hereinafter also referred to as the Party) vide their application under sub-section (1) of Section 97 of the CGST/SGST Act, 2017 sought an Advance Ruling on ”Recommendation on the HSN Code and applicable tax rate to be used under GST for their product i.e. AMI (Anaerobic Microbial Inoculums). ” Therefore, in terms of said Section 97(2)(a) & (e) of CGST/SGST Act, 2017, the said application was admitted.
2. Following the personal hearing given to the applicant on 11.01.2019, the members of the Advance Ruling Authority for the state of Uttarakhand vide Advance Ruling No. 18/2018-19 dated 06.02.2019 ruled that:
Anaerobic Microbial Inoculums (AMI) will be classified under chapter sub-heading 31010099 of the heading 3101 of the GST Tariff and accordingly, the supply of these products will attract GST @ 5% [CGST @ 2.5% + SGST @ 2.5%] as on date.
3. GROUNDS OF APPEAL:-
3.1 Aggrieved by the said order passed by the Authority for Advance Ruling for the State of Uttarakhand, the department, represented by Shri Rajeev Kumar, Assistant Commissioner (Review), CGST Commissionerate, Dehradun, has filed the instant appeal dated 28.03.2019 on the following grounds:
a. Hon’ble Advance Ruling Authority, (Uttarakhand) has overlooked the fact that while classifying any goods we have to look into the name, character and use of the said good. In the instant case the AMI are colony of micro-organisms that can live and grow in an environment devoid of oxygen i.e. anaerobic environment and the primary use is to decompose biological waste generated by humans. Since AMI fasten the decomposition process so they act as an enzyme rather than a fertilizer and therefore more appropriately classifiable under Chapter 35 of the CGST Tariff under sub-heading 35079069.
b. Hon’ble Advance Ruling Authority, (Uttarakhand) overlooked the fact that AMI decomposes biological waste generated by humans into useable water and gases in an eco-friendly manner. These bacteria inoculums or AMI are specially developed in a monitored and controlled environment. In a way AMI works as a enzyme which decomposes biological waste and enzymes are classified under chapter sub-heading 35079069 of heading 3507 in GST Tariff heading as under;-
