The West Bengal Authority for Advance Ruling (AAR) issued a decision concerning the tax status of cotton seed de-oiled cake, a product used in animal feed, in response to an application from M/s Gupta Feed Products Pvt. Ltd. The company sought clarification on whether this product attracts a 5% Goods and Services Tax (GST) or is exempt, and whether they could claim Input Tax Credit (ITC) on its purchase. The inconsistency in practices among suppliers prompted the inquiry.
The AAR examined the relevant GST notification, specifically Entry No. 102 of Notification No. 2/2017–CT (Rate), which exempts certain feeds, including de-oiled cake, from GST. The Authority referred to a precedent set by the Gujarat High Court, which supported the exemption of cotton seed de-oiled cake from GST, regardless of how it is used or the supply channels involved.
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Consequently, the AAR ruled that cotton seed de-oiled cake is fully exempt from GST. As the product falls under the exemption schedule, the Authority clarified that Input Tax Credit is not available for its purchase or utilization, in accordance with Section 17(2) of the Central Goods and Services Tax (CGST) Act. Thus, sales of cotton seed de-oiled cake should not include any GST charges.
Authority: West Bengal Authority for Advance Ruling
Order Date: 17 October 2025
Case Title: M/s Gupta Feed Products Pvt. Ltd.
Facts
- The applicant, M/s Gupta Feed Products Pvt. Ltd., trades in animal and poultry feed products, including cotton seed de-oiled cake (HSN 23061020).
- The applicant approached the AAR to clarify whether the product attracts 5% GST or is exempt, given inconsistent practices among suppliers.
- The query also sought confirmation on eligibility of Input Tax Credit (ITC) and the correct classification of the product.
Issue
- Whether cotton seed de-oiled cake (HSN 23061020) is exempt under Notification No. 2/2017–CT (Rate) dated 28.06.2017, and if so, whether ITC can be claimed on its purchase or utilization?
Order
- The Authority referred to Entry No. 102 of Notification No. 2/2017–CT (Rate), which exempts “aquatic feed, poultry feed, cattle feed, including de-oiled cake.”
- Relying on the Gujarat High Court’s decision in Dharti Industries v. Commissioner (Appeals), it held that cotton seed de-oiled cake remains exempt regardless of its end-use or supply channel.
- The Authority emphasized that since the product falls under the exemption schedule, ITC on its inputs or procurement is not available under Section 17(2) of the CGST Act.
- Therefore, supplies of cotton seed de-oiled cake are exempt from GST, and no tax shall be charged on such sales.
