Page 116 - GSTL_27th August 2020_Vol 39_Part 4

442 GST LAW TIMES [ Vol. 39
3.1 The taxpayer is engaged in supply of ‘shatamrut chyavan’ which is
a complete animal feed supplement used in cattle & remnants to improve milk &
milk fat & resistant to diseases and the classification of the said product under
Chapter No. 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST attracting
‘Nil’ rate of GST as per Sr. No. 102 of Notification No. 2/2017-C.T. (Rate), dated
28-6-2017 is correct.
3.2 Circular No. 80/54/2018-GST, dated 31-12-2018 clearly describes
that while deciding the classification of product claimed as animal feed supple-
ments, it may be necessary to ensure that the said animal feed supplement is or-
dinarily or commonly known to the trade as products for a specific use in animal
feeding. It covers only such products which in the form supplied are capable of
specific use as feed supplement for animal & not capable of any general use. As
the product brochure, leaflet & online company product advertisement shows
that it is a complete food supplement used for cattle feed only & there is no other
use of the product and also because the product under MVAT regime was
claimed under compounded animal feed (Sch. Entry A-4) as tax free, therefore
the said product must be classified under Chapter No. 2309 90 10.
3.3 Goods falling under Chapter No. 2309 90 10 cannot be treated as
‘waste of sugar manufacture in the form of pellets under Heading 2303 attracting
5% of GST as per Schedule-I (Sr. No. 104) of Notification No. 1/2017-C.T. (Rate),
dated 28-6-2017. Applicant’s interpretation that the end use of the product is nu-
trition supplement to the cattle feed but cannot be treated as cattle feed in isola-
tion & hence to be classified under Chapter No. 2303 attracting 5% GST is not
correct.
3.4 Chapter No. 2303 includes residues of starch manufacture and simi-
lar residues, beet pulp, bagasse and other waste of sugar manufacture, brewing
or distilling drugs and waste, whether or not in the form of pellets. Applicant’s
interpretation that the basic raw material of their product is molasses (60% of
total ingredient as per chemical formula that submitted by applicant) & classified
under Chapter No. 2303 20 00 i.e. other waste of sugar is wrong.
3.4.1 During the manufacturing of sugar from sugarcane in sugarcane
factory several valuable by-products like molasses, bagasse, filter press cake, ash
etc. are produced along with sugar. Among these by-products molasses & ba-
gasse are more valuable raw materials used in different manufacturing indus-
tries. In the process of manufacturing of sugar, bagasse emerges as resi-
due/waste of sugarcane which is neither a manufactured product nor final
product of sugarcane industry & therefore classified under sub-heading 2303 20
00, as bagasse & other waste of sugar manufacturing. In sugar manufacturing
molasses is an intermediary product, or by product. It is not waste, as waste is
never manufactured & it only emerges in the manufacture of final product.
Hence molasses attracts specific rate of duty under Tariff Heading 1703 of 1000
of the GST Tariff. Though the major residual mixture of the subject product is
molasses, it does not fall under Chapter No. 2309 90 10 & therefore not treated as
waste of sugar manufacture under Heading 2303.
4. Hearing :
Preliminary hearing in the matter was held on 17-12-2019. Shri Devendra
Aathavle Advocate appeared and requested for admission of their application.

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