In re Arun Traders (GST AAR Tamil Nadu)
The Tamil Nadu Appellate Authority for Advance Ruling (AAR) recently disposed of an application filed by M/s Arun Traders, a manufacturer of Panangarkandu (Palmyra sugar), after the applicant opted to withdraw its request. The case arose following an inspection conducted by the Joint Commissioner (ST), Intelligence, Tirunelveli, under Section 67 of the Tamil Nadu GST Act during July–August 2024. Officials noted discrepancies in the classification of goods, alleging that Arun Traders reported sales under the 5% GST category applicable to jaggery, whereas their product was more appropriately classified under “Others” of HSN Code 1702, attracting 18% GST. Consequently, Form GST DRC-01A was issued for the financial years 2018–19 to 2023–24, prompting the taxpayer to seek an advance ruling.
The applicant contended that Notification No. 6/2022-Central Tax (Rate) dated 13-07-2022, placed jaggery of all types, including Palmyra jaggery, in Schedule I at a concessional GST rate of 5% under HSN Codes 1701 or 1702, provided it was pre-packaged and labelled. On this basis, Arun Traders argued that their product qualified for the lower rate and requested the AAR to set aside the Form GST DRC-01A notice. The taxpayer also emphasized that their classification as palm sugar was consistent with the notification’s wording.
