Case Law Details
In re Pandey Traders (GST AAAR Uttar Pradesh)
Introduction: In a recent legal appeal, M/s Pandey Traders challenged the Advance Ruling Order issued by the Authority for Advance Ruling, Uttar Pradesh, regarding the Goods and Service Tax (GST) classification of their product. The appellant is involved in the manufacturing of unbranded unmanufactured tobacco, which includes the addition of scent to raw tobacco dust. This article delves into the legal intricacies of the case and the grounds on which the appellant seeks a modification of the ruling.
Background: M/s Pandey Traders, a proprietorship concern based in Uttar Pradesh, appealed against the order classifying their product under Chapter 2403 of the GST Tariff. The crux of the matter lies in whether the addition of scent to raw unmanufactured tobacco dust alters its classification from unmanufactured to manufactured tobacco.
Key Questions Raised: The appellant presented specific questions to the Authority for Advance Ruling, seeking clarity on the classification of their product. They questioned whether the incorporation of scent in raw unmanufactured tobacco dust, followed by subsequent sales on a business-to-business (B2B) and business-to-consumer (B2C) basis, transforms the character of unmanufactured tobacco into manufactured tobacco.
Advance Ruling and Grounds of Appeal: The Authority for Advance Ruling based its decision on a Supreme Court case, asserting that the cumulative effect of processes applied to tobacco before sale constitutes a manufacturing process. However, M/s Pandey Traders challenged this ruling on several grounds:
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