In re Pragathi Enterprises (GST AAR Andhra Pradesh)
Applicant has sough advance ruling on following issues-
1. What is the rate of GST applicable on tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves?
2. If the applicant purchases tobacco leaves form other dealers who have purchased them farmers, for the purpose of trading what will be the applicable rate of tax?
3. If the applicant segregates the tobacco into grades depending upon their size(width), colour/shade,length, texture of the leaf etc., and sells such graded tobacco leaf what is the applicable rate of tax?
4. If the tobacco leaves are butted and sold to other dealers what will be the applicable rate of tax?
5. If the applicant gets the tobacco leaves redired without getting them threshed what is the applicable rate of tax?
6. If the applicant gets the tobacco thereshed and redried on job work basis at GLT plants and then sells such threshed and redried tobacco leaves what is the applicable rate of tax?
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, ANDHRA PRADESH
M/s PRAGATHI ENTERPRISES, Jammulapalem Village, Tangutur, Prakasam-523274 (hereinafter also referred as an applicant), has filed an application in Form GST ARA-01, dated :07.09.2018, for seeking advance ruling on ‘rate of tax under GST w.r.to classification of the commodity’ to their supplies’. The issues raised by the applicant in his application for advance ruling are given here under….
♦What is the rate of GST applicable on tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves?
♦ If the applicant purchases tobacco leaves from other dealers who have purchased them farmers, for the purpose of trading what will be the applicable rate of tax?
♦If the applicant segregates the tobacco into grades depending upon their size ( width), colour/shade, length, texture of the lear etc., and sells such graded tobacco leaf what is the applicable rate of tax?
♦If the tobacco leaves are butted and sold to other dealers what will be the applicable rate of tax?
♦If the applicant gets the tobacco leaves re dried without getting them threshed what is the applicable rate or tax?
♦If the applicant gets the tobacco threshed and re dried on job work basis at GLT plants and then sells such threshed and re dried tobacco leaves what is the applicable rate of tax?
1. The applicant is a trader in tobacco in all varieties and form of tobacco available. Guntur and Prakasam Districts are famous for tobacco leaf and various verities of Tobacco, mainly FCV as well as Natu tobacco (Non-FCV) are widely available in these regions.
2. The applicant is registered with The Tobacco Board as “Dealer in Tobacco” vide Regn No:TB/DEALER/2018/4753, but not registered under GST as his turnover is below the threshold limit. However he would like to register with GST authorities in anticipation of his growing business requirement as and when the turnover crosses the threshold limit.
3. It is submitted that,
a. Until the enactment of GST Act, the products of Tobacco leaves / Unmanufactured Tobacco were not under the tax net both under the VAT laws and under Central Excise laws. Even the service portion of threshing and redrying was held to be exempt under Service tax law. After the introduction of GST, the commodity of tobacco is brought under the taxability from the stage of tobacco leaves itself.
b. The applicable rates of unmanufactured tobacco is covered under two heads under the tariff which are as under vide Notification no; 1/2017, Central Tax (Rate), both having the same HSN Code of 2401, viz.,
