GST
TRT-2025-
AAR Gujarat
Date:-12-06-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 12 June 2023
Key Pointers –
- The Applicant, M/s. Devendrakumar Rambhai Patel, wishes to undertake supply of the product known as 'Kandi Ravo', which is a tobacco waste.
- Though the waste tobacco is mixed with natural clay and water, the nature of the product is not altered & even the consumer base remains the same ie tobacco manufacturers. As per their understanding GST compensation cess is also not leviable on the product. The applicant has further informed that it is sold in 30-35 kg bags & its price range is also not similar to that of chewing/scented tobacco.
- The issue involved here is the What will be the classification of the goods 'Kandi Ravo'?
- The AAR observed that HSN notes for tariff item 2401, covers unmanufactured tobacco in the form of whole plants/leaves in natural state, cured or fermented leaves, whole, stemmed/stripped, trimmed/semi tri broken/cut, blended cased with a liquid of appropriate composition mainly prevent drying and to preserve the flavour.
- In terms of section 2(72) of the CCST Act, 2017, which defines manufacture since no new product emerges post the crushing of tobacco refuse & mixing it with natural clay & water, it appropriate that the product is classifiable under CTH 2401 as 'unmanufactured tobacco; tobacco refuse'. Thus, it was held that the supply of applicant of 'kandi rayo' is classifiable under 24013000.
- Since the applicant proposes to supply/supplies the said 'kandi ravo' to their customers in 30-35 kg bags, without any brand name, labelling, etc, it was held that the applicant would be/is liable to pay GST @ 28% [14 % CGST and 14 % SGST] in notification No. 1/2017-CT(Rate), Sr. No. 13, Schedule IV.
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