Case Law Details
In re Kantaben Rameshbhai Chaudhari, Krishna Entperises (GST AAR Gujarat)
This discussion centers around a critical case from the Authority for Advance Rulings (AAR) in Gujarat: ‘In re Kantaben Rameshbhai Chaudhari, Krishna Enterprises.’ The subject matter is the classification and taxation of veterinary instruments, specifically the AI Crate/Travis (Artificial Insemination Crate), under GST.
According to the ruling, the AI Crate/Travis is classified under Tariff Item (TI) 7306 of the Customs Tariff Act. This product, used primarily for the medical treatment and artificial insemination of animals, is subjected to GST at a rate of 18% (9% CGST and 9% SGST). Despite the applicant’s view that the product should fall under TI 9018, the AAR ruled in favor of TI 7306 due to the product’s structure, made predominantly of iron and steel tubes and pipes. This decision aligns with the Andhra Pradesh AAR ruling in a similar case.
(1) What is the rate of tax applicable for veterinary instruments, which is known as AI crate (Artificial Insemination Crate)/Travis?
The product AI crate (Artificial Insemination Crate)/Travis is leviable to GST at the rate of 18% [9% CGST and 9% SGST).
(2) Classification of the aforementioned product?
The product in question viz AI crate (Artificial Insemination crate)/Travis is classified under TI 7306 of CTH.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, GUJARAT
Kantaben Rameshbhai Chaudhari, Krishna Entperises (Trade name), Shop No. 5/A, Rajshree Complex, 1 st floor, Manav Ashram Chokdi, Mehsana, Gujarat-384 001 [for short—`applicant is registered under GST and their GSTIN is 24BRXPC8776L1ZU.
2. The applicant is engaged in the manufacture of veterinary instruments known as Al Crate (Artificial Insemination crate)/travis. This equipment/ instrument is used for medical treatment of animal. It is installed at Veterinary Dispensary
3. In the application, the size of the product so manufactured is provided which is as under:
Approx. size: Length 167.5 cm; Width 75 cm
Front height: 150 cm; Back height: 120 cm
Length of cross support: 120 cm
Foundation plate: 7.58 * 7.5 * 3 mm
Securing ring: 1.2 cm MS round bar.
4. The procedure adopted for manufacture of AI Crate (Artificial Insemination crate)/travis is also provided which briefly, is as under:
- Travis is generally made of strong durable iron bars & fixed on the ground with cement concrete;
- it has 4 posts affixed on the ground & cemented with two or more cross pieces at each side to safeguard the person from animal kick;
- it is manufactured out of best quality original galvanized iron pipe; the 4 legs are welded with base plates [mild steel] of specific inches square with specific thickness.
5. The use of the AI Crate (Artificial Insemination crate)/Travis, as listed out in the application are as under:
- It is used in animal husbandry department for medical treatment of cattle [cows & buffalo];
- It is mainly used in controlling large animals for the purpose of treatment and operations;
- It is also used for controlling animal during artificial insemination; cattle is fixed and tied to the iron tubular Travis to ensure that they do not move during the course of treatment.
6. The applicant is of the view that their product falls under TI 9018. He has also relied on the judgement of the Hon’ble Supreme Court in the case of Delhi Cloth and General Mills Co Ltd. [reported at 1977(001) ELT 199 (SC)].
7. In view of the foregoing, the applicant has filed this application, seeking advance ruling on the below mentioned questions viz
1. What is the rate of tax applicable for veterinary instruments, which is known as AI crate (Artificial Insemination Crate)/Travis?
2. Classification of the aforementioned product?
8. Personal hearing was granted on 08.05.2023 wherein Shri Ramesh bhai Chaudhari, Shri S D Modi, Advocate and Shri Kaushik Chhable, Tax Consultant, appeared on behalf of the applicant and reiterated the facts as stated in the application. They showed photograph of the instrument for which this ruling on its classification is being sought. It was further informed that the instrument is only used for artificial insemination. They lastly relied on copies of tender and certificates enclosed with application to substantiate their averment.
Discussion and findings
9. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act.
10. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant’s submission/interpretation of law in respect of question on which the advance ruling is sought.
11. Before adverting to the submissions made by the applicant, we would like to reproduce the competing tariff entries, for ease of reference:
12. Notification No. 01/2017-CT (Rate) dated 28.06.2017 which prescribes the rate of tax (schedules), further under ‘Explanation’ states as follows:
(iii) “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
(iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.
13. The rival tariff entries as far as the classification of product in question is concerned is TI 9018 and TI 7306. The applicant has provided a diagram of the product viz AI crate (Artificial Insemination Crate)/Travis, which is reproduced below for ease of reference viz
14. We would first like to take up the classification of the product in dispute ie AI crate (Artificial Insemination Crate)/Travis. We find that the applicant is of the view that his product falls under TI 9018. Now, the description of the TI as provided in the Customs Tariff states as follows:
“Instruments and appliances used in medical, surgical, dental or veterinary sciences, including scientigraphic apparatus, other electromedical apparatus and sight testing instruments.”
15. The diagram of the product in question viz AI crate (Artificial Insemination crate)/Travis, and the photograph of the product that was shown during the course of personal hearing, clearly depict that the product is nothing but a structure made of tubes, pipes of iron and steel. Ideally, therefore, the product falls within the ambit of TI 7306.
16. Even otherwise, we find that for the product to be classified under 11 9018, it should be a instrument or an appliance or at least an The applicant has not produced anything before the Authority which would enable us to arrive at a finding to hold that the product in question is a instrument or an appliance or an apparatus. This being the fact, the product would not fall within the ambit of TI 9018.
17. As far as rate of tax is concerned, we find that in terms of Notification No. 01/2017-CT (Rate) dated 28.06.2017, Schedule III, Sr. No. 220, the rate of GST is 18%.
18. Our above finding is substantiated vide Ruling No. 05/AP/GS dtd 1.2021 by AAR, Andhra Pradesh in the case of M/s SKM Visakhapatnam.
19. In the light of the above, we rule as under:
RULING
1. The product AI crate (Artificial Insemination Crate)/Travis is leviable to GST at the rate of 18% [9% CGST and 9% SGST).
2. The product in question viz AI crate (Artificial Insemination crate)/Travis is classified under TI 7306 of CTH.
