♦ The by products of milling of dal/pulses were exempted from tax considering these as cattle feed vide entry No 102 of Notification 2/2017. Thereafter, the government has issued clarification vide circular 179/11/2022 dated 3.8.2022 that if such byproducts are used as ingredient of cattle feed, then such byproducts will be liable to tax at 5%. Therefore, to resolve the tax perplexities, the government has issued various clarifications and notifications under GST law as follows:
Tax Rate Notification
Prior to Amendment
| Sl. No. 103A of Schedule-I of Notf. 1/2017 dated 28.6.2017 | Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants [other than aquatic feed including shrimp feed and prawn feed, poultry feed and cattle feed, including grass, hay and straw, supplement and husk of pulses, concentrates and additives, wheat bran and de-oiled cake] |
After Amendment
| Sl. No. 103A of Schedule-I of Notf. 1/2017 (Substituted vide Notf 12/2022 dated 30.12.2022) | -“Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants [other than aquatic feed including shrimp feed and prawn feed, poultry feed and cattle feed, including grass, hay and straw, supplement and additives, husk of pulses including chilka, concentrates including chunni or churi, khanda, wheat bran, de-oiled cake |
Hence, the husk of pulses including chilka, concentrates including chunni or churi, khanda are excluded from the entry of taxable goods. The GST council in its 48th meeting has recommended to fully exempt the supply of such by products, irrespective of its end use. Therefore, it can be analysed that even if such by products are used as ingredient of cattle feed, they are exempted from tax.
Exemption Notification
| Entry and Notification No. | Description |
| S. No. 102 of Notification No. 2/2017-Central Tax (Rate), dated the 28th June, 2017 | 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] |
♦ Vide Notification 13/2022, the following entry is inserted in serial number 102C under HSN Code 2302, 2309 which includes husk of pulses including chilka, concentrates including chunni or churi, khanda. Hence, such byproducts are exempted from GST with effect from 01.1.2023.
♦ Few taxpayers have been questioned by the GST Authority on the applicability of GST on such by products for the tax period from 01.7.2017 till 31.12.2022 as the exemption entry is notified with effect from 01.1.2023.
♦ Para 8.6 of the B.I. & C. Circular No. 179/11/2022-GST, dated 3-8-2022 read as follows “The GST Council examined the issue and recommended that a clarification be issued in this regard. It also recommended that in view of the prevailing multiple interpretations and genuine doubts regarding the applicability of GST, the issue for past periods may be regularized on as is basis.”
♦ Para 3.3 of CBIC Circular No. 189/01/2023-GST dated 13/01/2023 read as follows. “Further, as per recommendation of the GST Council, in view of genuine doubts regarding the applicability of GST on by products, matters that arose during the intervening period are hereby regularized on “as is” basis from the date of issuance of Circular No. 179/11/2022-GST, dated 3-8-2022, till the date of coming into force of the above-said S. No. 102C and the entries relating thereto. This is in addition to the matter regularized on as is basis vide para 8.6 of the said Circular.
♦ The “as is basis” can be read as where tax has been paid by taxpayers on such byproducts, then such taxpayers cannot apply for refund of taxes which is already paid. In case taxpayers has not paid taxes on such byproducts till date, then such taxpayers are not liable for GST for such tax periods. Therefore, the author believes that based on the above reading of the circulars, there is no applicability of tax on such byproducts from 01.7.2017 to 31.12.2022 irrespective of its end use. The Author contends that as a trade facilitation measure, the refund should be granted to the taxpayers in case tax is already paid on such byproducts due to multiple versions and interpretation under the GST law.
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