Adarsh Plant Protect Ltd appealed against an Advance Ruling classifying their manually operated seed dressing drum under HSN 8436 liable to 12% GST. The authority held the product was agricultural machinery under Chapter 8436, rejecting claims for nil or 5% GST rates, and upheld the original ruling.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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GUJARAT APPBLLATE AUTHORITY I.'ORADVAI\CE RULING GOODS AIID SERVICES TAX D/5, RAJYA KAR BHAVAN, ASHRAM ROAD, AHMEDABAD_ sItO OO9.
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ADVANCE RULING(APPEAL) NO. GUJ/GAAAR/APPEAL|^\2Z\ tL (IN APPLICATION NO. Advance Ruling/SGST&CGST12021 I AN12)
Date :d,6 .08.2022
| Nameandaddressofthe appellant |
IWs. Adarsh Plant ProtectLtd., PlotNo.-604,Phase-IV,GIDCEstate,Vithal Udyognagar, Anand-388121 |
|---|---|
| GSTIN ofthe appellant | 24AARCA66s0QlZE |
| AdvanceRulingNo.andDate | GUJiGA.APUPUZII2021dated09 .07.2021 |
| Dateofappeal | 05.08.2021 |
| DateofPersonalHearing | 28.07.2022 |
| Presentforthe apPellant | ShriAtishPatel(MD)andShri KetanMaheshwari (cFo). |
At the outset we wouldlike to make it clear that the provisions of the Central Goods and Services TaxAct, 2017and Gujarat Goodsand Services Tax Act, 2017 (hereinafter referred to as the 'CGSTAct,2017' and the 'GGST Act,2017 ') are in pari materia and have thesame provisions in like matterand differ from each other only on a few specificprovisions. Therefore, unless a mention is particularlymade to such dissimilar provisions,a referenceto the CGST Act,2017 wouldalso mean reference to the corresponding similarprovisions in the GGST Act,2017.
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5.1 In view of the foregoing, the GAAR ruled as follows:-
"Seed dressing, coating and treattng drum machine is classified at HSN 84368090 tariffitem and liable to GST at r 2% [6% ]GST + 6%iGSTJ.,,
6 Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal
6.1 The appellant in the ground of appeal has submitted that only because their manually operated seed dressing drum does consist of Drum in u,hich seeds ar coated with chemicals before sowing, is not a correct base to classifu their product under HSN Code 8436. The basic fact and necessity of HSN Code 8436, which includes various agricultural machinery fitted with mechanical or thermal equipment. Under HSN Code 8436 the machinery operates with use of additional power of mechanical or thermal kind. Whereas their product i.e. manually operated seed dressing drum is not fitted with any mechanical or thermal equipment but it is rotated with hand and opened or closed with hand and therefore, cannot be classified under HSN 8436. The appellant also submitted a CD containing a video for understanding operation of manually operated seed dressing drum.
6.2 The appellant submitted that their manually operated seed dressing drum should either be classified under HSN 8201 which attract Nil rate of GST where manually operated agriculture or animal driven tools are classified or under HSN g43 / which attracts 5o/o rate of GST where machinery for cleaning, sorting or grading of seed or grain is included.
6.3 The appellant submitted that their product is manually operated and is used to cover and coating of chemicals over seeds or grains before sowing to increa.se their germination and immunity against disease cluring early period of growing and hence classifiable under HSN 8437 which attracts 5yo rate of GST.
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7 . During the course of personal hearing held on28.07 .2022,the appellantreiterated the submissions made in the appeal dated 02.08.2021.They furthersubmittedthat if exemption is not granted then their product will become expensive for the farmers.
F.INDINGS :-
CHAPTER 82
8201 - HAND TOOLS, THE FOLLOWING: SPADES, SHOVELS MATTOKS, PICKS, HOES, FORKS AND RAKES; AXES, BILL HOOKS AND SIMILAR HEWING TOOLS; SECATEURS AND PRUNERS OF ANY KIND; SCYTHES, SICKLES, HAY KNIVES, HEDGE SHEARS, TIMBER WEDGES AND OTHER TOOLS OF A KIND USED IN AGRICULTURE, HORTICULTURE OR F'ORESTRY.
The Chapter Note I of Chapter 82 of Custom Tariff Act, 1975 is read as under:
I. Apart from blow lamps, portable forges, grinding wheels with frameworks, manicure or pedicure sets and goods of heading 8209, this chapter covers only articles with a blade, working edge, working surface or other working part of:
a. Base metal;
b. Metal carbides or cermets;
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CHAPTER 84
8437 - MACHINES FOR CLEANING, SORTING OR GRADING SEED, GRAIN OR DRIED LEGUMINOUS VEGETABLES; MACHINERY USED IN THE MILLING INDUSTRY OR FOR THE WORKINC OF CEREALS OR DRIED LEGUMINOUS VEGETABLES, OTHER THAN FARM-TYPE MACHINERY.
1l.l The relevant abstract from HSN with reference to Chapter 8201 is given below:
"The Chapter coyers tools which can be used independently in the hand, whether or not they incorporate simple mechanisms such as gearing, crank-handles, plungers, screv) mechanisms or levers. Appliances are, however, generally clossified in Chapter 84 if they are designed for fixing to a bench, a wall, etc., or if by reason of their weight or size or the degree offered required for their use, they are fitted with base plates. stands, supporting frames, etc., for standing on the floor, bench, etc. "
11.2 The relevant abstract from HSN with relerence to Chapter 8437 is given below: "Headings 84.25 to 84.78 cover machines and apparatus which, with certain exceptions, are classified there by reference to the field of industry in which they are used, regardless of their particular function in thatfield."
l2.l Further, Chapter Heading 8437,as narratedabove, includes machines lbr cleaning sorting or grading seeds,grains or dried leguminousvegetables etc other than farm type machinery, whereas appellantsproduct isclearlysaid to be a farm typemachineryused by farmers during agriculture to cover, coatand treat chemicalson seeds beforesowing, which is not covered under ChapterH eading8437 of the Customs Tariff Act, 1975.
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and that machinery under HSN code 8436 operates with use of additional power of mechanical or thermal kind whereas their product i.e. manually operated seed dressing drum is not fitted with any mechanical or thermal equipment but it is rotated with hand and opened or closed with hand and therefore, cannot be classified under HSN 8436. For reference, Chapter Heading 8436 of Customs Tariff Act , 197 5 is mentioned below:
| 8436 | OTHERAGRICULTURAL, HORTICULTURAL,FORESIRY, |
|---|---|
| POULTRY-KEEPINGORBEE-KEEPINGMACHINERY, |
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| INCLUDINGGERMINATIONPLANTFITTEDWITH |
|
| MECHANICALORTHERMAL EQUIPMENT;POULTY INCUBATORSANDBROODERS; |
|
| 84361000 | Machineryforpreparinganimalfeedingsfurfs Poultry-keepingmachinery;poultry incubatorsand brooders: |
| 84362100 | Poultry incubatorsand brooders |
| 84362900 | Other |
| 843680 | Other machinery: |
| 84368010 | Germinationplant fittedwithmechanicalandthermalequipment: |
| 84368090 | Other |
13.1 The following explanatory note is provided in HSN explaining the scope of Chapter heading 8436:
"The heading covers machinery, notfalling in headings 84.32 to 84.35, which is of the type used on forms (tncluding agricultural schools, co-operattves or testing stations), in forestry,marketgardens, or poultry-keepingor bee-keeping farmsor the like. However, it excludes machines clearly of a kind designedfor industrial use."
"These include :
(A) Seed dusting machines usually consisting of one or more hoppers feeding a revolving metal drum in which the seeds are coated with insecticidal or fungicidal powders. However, the heading excludes powder spray,ing machines (heading 84.24)."
From thc explanatory notes to HSN 8436, which explains the scope of the entry, it is found that, other agricultural machinery includes Seed dusting machines consisting of a revolving drum in which the seeds are coated with insecticidal or fungicidal powders. The appellant have mentioned in their appeal, inter-alia, that their machinery is used to cover and coating of chemicals over seeds or grains before sowing to increase their germination and immunity against disease. Further the product in question is an agricultural machinery, and the same is a farm-type machinery. . Thus there is thus no doubt that the product in question is covered under heading 8436. Moreover heading 8437 specifically excludes 'farm-type machinery', further strengthening the classification ofsubject goods under heading 8436.
13.2 The appellant's product viz. manually hand operated seed dressing, coating and treating drum is covered within the description provided under the HSN Code 8436. The appellant's product in its use as well as its function is as described under the said HSN code. Therefore, we find that the GAAR has correctly classified the product in question under Chapter Heading 8436 and tariff item 8436 80 90.
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Torawane) Member (SGST)
) GSr)
Place :Ahmedabad Date'fl$.08.2022.
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3 issues framed by the court
Whether the agricultural manually hand operated seed dressing, coating and treating drum is classifiable under HSN Code 8201 or 8437.
Whether theagricultural manually hand operated seed dressing, coating and treating drum is classifiable under HSN Code 8436.
Whether the Advance Ruling imposing GST at 12% on the product should be upheld.
2 provisions across 2 enactments
Gujarat Appellate Authority for Advance Ruling
Adarsh Plant Protect Ltd.
Rawat
Thakkar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
