Case Law Details

Case Name : In re Crux Biotech India Pvt Ltd. (GST AAR Andhra Pradesh)
Appeal Number : Advance Ruling No. 13/AP/GST/2021
Date of Judgement/Order : 26/02/2021
Related Assessment Year :

In re Crux Biotech India Pvt Ltd. (GST AAR Andhra Pradesh)

Q. What is the accurate HSN Code under GST tax slabs for Distillery Dry Grains Soluble (DDGS) and Distillery Wet Grains Soluble (DWGS) (Cattle feed)?  The Contention of the applicant is that, earlier Central Excise Duty was paid at NIL rate under CETA 2309 and the introduction of GST cannot alter the classification of the by–product.

It is evident from the application that the applicant approached the Authority for Advance Ruling on an issue which has already been pending with the proper officer.

It bars this authority to take up or admit an application which has been already pending or decided in any proceedings in case of the applicant under any of the provisions of the Act under proviso to section 98(2), which reads as under,

“(2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application:

Provided that the Authority shall not admit the application where the question raised

in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act:”

Hence, the applicant’s plea for admission of his application for advance ruling in terms of proviso of sub section (2) of section 98 of CGST Act, 2017 is rejected.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, ANDHRA PRADESH

(Under sub-section (2) of Section 98 of Central Goods and Services Tax Act, 2017 and sub-section (2) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017)

1. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and SGST Act, 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the APGST Act.

2. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and AP GST Act respectively) by M/s. Crux Biotech Pvt Ltd. (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017.

3. Brief Facts of the case:

  • M/s. Crux Biotech India Private Limited (CBIPL) is engaged in the manufacture of Extra Neutral Alcohol (ENA) with licensing capacity of 75 KLPD as permitted by the Government of Andhra Pradesh.
  • The residue generated from the manufacturing process of ENA/RS has a shelf life of less than 24 hours. The unit further processes the said esidue which results in manufacture of “feed supplement”.
  • The feed supplement produced can be either used as cattle feed directly or is used in the manufacture of cattle feed/ fish feed.
  • The manufacturing process of feed supplement requires the additional plant and machinery, power, steam, time lines and manpower for processing.
  • The broken rice and the maize are the core raw materials used in the manufacturing process of ENA. The emerged new by-product contains different biological characteristics than that of the raw materials being used in the process.
  • The feed supplement i.e., Distillery Dry Grains Soluble (DDGS) and Distillery Wet Grains Soluble (DWGS) (Cattle feed) contains high protein content and minerals for the sustained growth of animals and fish.
  • The applicant approached this authority to seek clarification or taxability of residue products of DDGS/DWGS and its appropriate HSN Code.

4. Question raised before the authority:

What is the accurate HSN Code under GST tax slabs for Distillery Dry Grains Soluble (DDGS) and Distillery Wet Grains Soluble (DWGS) (Cattle feed)?

  • The Contention of the applicant is that, earlier Central Excise Duty was paid at NIL rate under CETA 2309 and the introduction of GST cannot alter the classification of the by-product.
  • On Verification of basic information of the applicant, it is observed that the applicant is under State jurisdiction, i.e. Assistant Commissioner (ST), Nandigama Circle, Vijayawada Division. The application has been forwarded to the jurisdictional officer with a copy marked to the Central Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017 and accordingly the remarks are obtained from the officer concerned.

Remarks of the Jurisdictional Officer:

  • The State jurisdictional officer concerned, submitted that DRC-01A dated 10.12.2020 had been issued to the applicant intimating the tax amount ascertained as being payable under section 73(5) /74(5) read with Rule 142(1A).
  • The applicant claimed exemption on supply of its by-products DDGS/WDGS (Wet cake) under HSN Code 2309, which describes,

“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 [other than rice-bran]” as nil rated.

  • The Jurisdictional officer has taken a different view that the tax payer is manufacturer of IMFL/ENA and therefore it is a brewing/ distillery unit and the residues specifically come under the HSN Code 2303, which describes,

” 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” and taxable © 5%.

  • The jurisdictional officer issued DRC-01A with the amount of tax payable as Rs. 4,67,80,779/- on DDGS/ DWGS sale turnovers for the period encompassing July 2017 to October 2020.
  • Subsequently inspection had been conducted by the jurisdictional officer on 16.10.2020 basing on the authorisation issued by the Joint Commissioner (ST), Vijayawada-I Division.
  • The Jurisdictional officer remarked that the applicant had approached the Advance Ruling authority after the initiation of the proceedings against him in contravention of the proviso to section 98(2) of APGST Act.

6. Virtual Hearing:

The proceedings of Hearing were conducted through video conference on 05th February, 2021, for which the authorized representative from M/s. K. Venkata Reddy & Associates, Charted Accountants attended and reiterated the submissions already made.

7. Discussion and Findings:

We have examined the issues raised in the application and the submissions of the applicant as well. In the context of the remarks submitted by the jurisdictional officer, we examine the admissibility of the application without going into the merits of the case.

It is evident from the application that the applicant approached the Authority for Advance Ruling on an issue which has already been pending with the proper officer.

It bars this authority to take up or admit an application which has been already pending or decided in any proceedings in case of the applicant under any of the provisions of the Act under proviso to section 98(2), which reads as under,

“(2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application:

Provided that the Authority shall not admit the application where the question raised

in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act:”

Hence, the applicant’s plea for admission of his application for advance ruling in terms of proviso of sub section (2) of section 98 of CGST Act, 2017 is rejected.

Proceedings

In view of the foregoing, the application is not admitted.

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