Case Law Details

Case Name : In re Allied Blenders and Distillers Private Limited (GST AAR Telangana)
Appeal Number : TSAAR Order No.14/2022
Date of Judgement/Order : 14/03/022
Related Assessment Year :

In re Allied Blenders and Distillers Private Limited (GST AAR Telangana)

The applicant’s chief argument is that their bye-products i.e., Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘DDGS’) are used only as cattle feed and therefore have to be classified under S.No.102 of Notification No. 02/2017.

It is observed that the Notification No. 01/2017 classifies ‘brewing or distillery dregs and waste’ at S.No.104 under tariff item ‘2303’ and the rate applicable is 5% on these products.

Notification No. S. No Chapter / Heading
/ Sub-heading /
Tariff item
Description of Goods Rate
02/2017 102 2302, 2304, 2305, 2306, 2308, 2309 Aquatic feed including shrimp feed and  prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates  & additives, wheat
bran & de-oiled cake
Nil
01/2017 104 2303 Residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture,  brewing  or distilling dregs and waste, whether or not in the form of pellets 5%

It is further seen that the chapter headings of the tariff items which qualify as cattle feed at the S.No.102 of Notification No. 02/2017 do not include the HSN ‘2303’. Thus S.No.102 of Notification No. 02/2017 specifically excludes ‘brewing or distillery dregs and waste’. As seen from the averments submitted by the applicant the Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘DDGS’) are clearly falling under ‘brewing or distillery dregs and waste’ and therefore under tariff item HSN No. ‘2303’. Hence these are excluded from the exemption Notification No. 02/2017.

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING,

1. M/s. Allied Blenders and Distillers Private Limited, H.No. 1-11-220/2, First floor, Sreenivasam, Brundavan Colony, Begumpet,Hyderabad, Hyderabad, Telangana- 500016 (36AAACY3846K1ZY) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules.

2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST 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 TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.

3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted

4. Brief facts of the case:

M/s. Allied Blenders and Distillers Private Limited are primarily engaged in manufacture of alcohol. In the process of manufacturing alcohol, the applicant produces certain bye-products by names distillery dry gain soluble (DDGS) and distillery wet grain soluble (DWGS). It is contended by the applicant that these are sold only as cattle feed as they have no other ‘known commercial uses’. It is their assertion that they are exempt from tax under GST. Hence this application.

5. Questions raised:

Whether the sale of produces Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘DDGS’) – ‘Cattle feed’ undertaken by the applicant is covered under serial no 102 of Notification No. 02/2017 – Central Tax (Rate) dated 28 June 2017 and whether these commodities are exempt from payment of GST?

6. Personal Hearing:

The Authorized representatives of the unit namely B. Srinivas, Advocate and T. Vijayendar Reddy, Regional Finance Controller attended the personal hearing held on 05-01-2022. The authorized representatives reiterated their averments in the application submitted and averred as follows:

1. That they have filed an application before AAR on 11.07.2020 subsequent to which date i.e., in Aug 2020 the DGGI has initiated an investigation on the question raised by the applicant and therefore that they are eligible for clarification from the AAR.

2. That they are a distillery and their byproducts i.e., distillery wet grain soluble and distillery dry grain soluble are used as cattle feed and therefore they are exempted under Sl.No.102 of Notification No. 02/2017..

3. That they rely on the end user test for their claim and request the AAR to dispose the case on detailed submissions made by them.

7. Discussion & Findings:

The applicant’s chief argument is that their bye-products i.e., Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘DDGS’) are used only as cattle feed and therefore have to be classified under S.No.102 of Notification No. 02/2017.

It is observed that the Notification No. 01/2017 classifies ‘brewing or distillery dregs and waste’ at S.No.104 under tariff item ‘2303’ and the rate applicable is 5% on these products.

Notification No. S. No Chapter / Heading
/ Sub-heading /
Tariff item
Description of Goods Rate
02/2017 102 2302, 2304, 2305, 2306, 2308, 2309 Aquatic feed including shrimp feed and  prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates  & additives, wheat
bran & de-oiled cake
Nil
01/2017 104 2303 Residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture,  brewing  or distilling dregs and waste, whether or not in the form of pellets 5%

It is further seen that the chapter headings of the tariff items which qualify as cattle feed at the S.No.102 of Notification No. 02/2017 do not include the HSN ‘2303’. Thus S.No.102 of Notification No. 02/2017 specifically excludes ‘brewing or distillery dregs and waste’. As seen from the averments submitted by the applicant the Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘DDGS’) are clearly falling under ‘brewing or distillery dregs and waste’ and therefore under tariff item HSN No. ‘2303’. Hence these are excluded from the exemption Notification No. 02/2017.

GST not exempt on Distillery Wet-DRY Grain Soluble

8. The ruling is given as below:

In view of the above discussion, the questions raised by the applicant are clarified as below:

Questions Ruling
Whether the sale of produces Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘DDGS’)   –   ‘Cattle feed’ undertaken by the applicant is covered under serial no 102 of Notification No. 02/2017 – Central Tax (Rate) dated 28 June 2017 and whether these commodities are exempt from payment of GST?

 

No.

Both the commodities fall under S.No.104 of Notification No. 01/2017 and are taxable at the rate of 5%.

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