Page 86 - GSTL_13th August 2020_Vol 39_Part 2

172 GST LAW TIMES [ Vol. 39
Commissioner (Central Tax) Guntur Division, Guntur to offer their remarks as
per the Section 98(1) of CGST/APGST Act, 2017. The jurisdictional officers con-
cerned had not responded whether there are any proceedings passed or pending
relating to issue on which Advance Ruling is sought by the applicant.
5. Applicant’s interpretation of law and facts :
Prior to the introduction of GST, the products of Tobacco leaves and
unmanufactured tobacco were not leviable to tax under VAT and Central Excise
Laws. The Hon’ble Customs, Central Excise and Service Tax appellate Tribunal,
Hyderabad had set aside the service tax demand raised on the process of thresh-
ing and redrying of tobacco leaves, saying that these are intermediate production
processes carried out in relation to agriculture and are exempt from Service Tax.
After the introduction of GST, Tobacco is brought under the taxability from the
stage of tobacco leaves itself. The applicable rates of unmanufactured tobacco are
covered under two heads under the tariff which are as under vide Notification
No. 1/2017-Central Tax (Rate), dated 28-6-2017, both having the same HSN Code
of 2401, as shown in Para No. 3 above.
Though there is clarity as to the product description in the above two
headings, since the terms ‘Tobacco leaves and ‘unmanufactured Tobacco (other
than tobacco leaves)’ are not defined in the Tariff, the applicant claims that classi-
fication of the commodity at various stages in the above specified heads may be a
contentious issue. The classification of tobacco under GST is not in tune with that
of the Customs tariff. The GST tariff mentioned only 4 digits HSN whereas Cus-
toms Tariff employs full 8 digit HSN code and as such there is no clarity as to the
further sub-classification of the tariff heads under GST. As per the Customs Tar-
iff, the relevant heads are as under :

2401 Unmanufactured tobacco; tobacco refuse.
2401 10 Tobacco, not stemmed or stripped
2401 10 10 Flue Cured Virginia Tobacco
2401 10 20 Sun cured Country (Natu) Tobacco
2401 10 30 Sun cured Virginia Tobacco
2401 10 40 Burley Tobacco
2401 10 50 Tobacco for manufactures of Bidis, not stemmed
2401 10 60 Tobacco for manufactures of Chewing tobacco
2401 10 70 Tobacco for manufactures of cigar and cheroot
2401 10 80 Tobacco for manufactures of Hookah tobacco
2401 10 90 Other
2401 20 Tobacco partly or wholly stemmed or stripped.
2401 20 10 Flue Cured Virginia Tobacco
2401 20 20 Sun cured Country (Natu) Tobacco
2401 20 30 Sun cured Virginia Tobacco
2401 20 40 Burley Tobacco
2401 20 50 Tobacco for manufactures of Bidis, not stemmed
2401 20 60 Tobacco for manufactures of Chewing tobacco
2401 20 70 Tobacco for manufactures of cigar and cheroot
2401 20 80 Tobacco for manufactures of Hookah tobacco
2401 20 90 Other
GST LAW TIMES  13th August 2020  86