It has been determined that rejected or damaged paddy seeds will be subject to a 5 percent GST by the Chhattisgarh Authority for Advanced Rulings (AAR). Therefore, rice that is unfit for human consumption or is used for other purposes would not be exempt from goods and services tax (GST).
Paddy seed that is not fit for human consumption will be classified under Chapter heading 100610, which attracts a five percent GST.
The ruling comes after Shraddha Traders, which runs a rice mill, sought clarity on the classification and applicability of GST on the sale of rejected paddy seed, which are unfit for human consumption but can be used for industrial purposes such as cattle feed production or manure production, among others.
GST rates are based on their classification under the harmonised system of nomenclature (HSN).
As of last week, the GST Council, which is led by the Union finance minister and includes representatives from all states and UTs, reduced the tax rates on pulse husks, such as chilka and concentrates, to nil, and on ethyl alcohol to 5%. During the Council’s 48th meeting, which was held via videoconference, no GST rate was raised on any items.
GST Council also clarified that Rab (rab-salawat) and fryums manufactured through extrusion are subject to 18% GST.
The higher rate of compensation cess is also applicable to motor vehicles that meet all four conditions, namely, are SUVs, have engines exceeding 1500 cc, are over 4000 mm in length and have a ground clearance above 170 mm.