In re Champalal Agricultural Works (GST AAR Rajasthan)
The Authority for Advance Ruling (AAR), Rajasthan, has provided clarity on the Goods and Services Tax (GST) classification of blades used as spare parts in chaff cutter machines. The ruling, sought by M/s Champalal Agricultural Works, addresses a discrepancy in the tax rates being applied in the market, offering a definitive stance for the applicant.
M/s Champalal Agricultural Works, a registered GST holder engaged in manufacturing, sought the advance ruling regarding the correct HSN (Harmonised System of Nomenclature) classification for the blades they produce. These blades are specifically designed as spare parts for chaff cutters, machines commonly used by farmers to cut straw for animal feed.
The applicant stated that they have consistently classified these blades under HSN Heading 8208 40 00, applying and discharging GST at a rate of 18%. The description for this heading is related to “Knives and cutting blades, for machines or for mechanical appliances.”
However, the applicant highlighted a market disparity. They informed the AAR that their customers and other trade sources indicated that identical blades were being classified by manufacturers and traders in other states under different HSN Headings, specifically 8436 10 00 or 8436 80 90. These headings fall under the broader category of “Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders,” with the subheadings relating to machinery for preparing animal feeding stuffs or other machinery within that category. The GST rate applied under these latter classifications was a lower 12%.
