Whether Coir Pith is taxable or Exempt-AAR

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Whether Coir Pith is taxable or Exempt-AAR

Whether Coir Pith is taxable or Exempt-AAR

 

(M/s. Jeena Export-AAR Tamilnadu)

Facts of the case:

  • M/s Jeena Exports is engaged in Trading in Coir Fibre, Coir Pith and Curled Coir. They have preferred an application seeking Advance Ruling on the following question: What is applicable GST rate for Coir Pith?’
  • The Applicant has stated that Coir pith is a by-product of the coir fibre processing industry. In the husk, coconut fibre are seen tightly packed along with non -fibrous, fluffy and light weight corlgr material known as coir pith or coir dust, which constitutes 50-70% of the husk.
  • In the process of extraction of coir fibre from husk, generally about one-third of the husk is processed into as coir fibre, whereas two-thirds of the husk is generated as coir pith. The sponge/ material that binds the coir fibre in the husk is the coir pith.
  • The composition and properties of coir pith vary depending on maturity of coconut, method of extraction and disposal, pcriod from cxtracting to ltse and environmental factors. As there is no specific GST rate for the same, rate of tax and classification was sought by the applicant, the same may be provided.
  • They stated that they purchase coconut husk and extract coir pith. They submitted write up of manufacturing process and undertook to submit invoices for procuring husk and invoices for selling coir pith within a week.

Held:

  • For determination of the applicable rate, the goods have to be correctly classified first. It is stated by the applicant that after extraction of fibre the non -fibrous spongy/ material that binds the coconut fibre in the husk is the coir pith.
  • They compress the same without adding any chemicals into blocks. From the manufacturing process and invoices submitted by the applicants, it is seen that the goods are raw coir pith which is either sold in loose dust form or compressed into bricks /blocks and sold.
  • From the submissions of the Applicant, it is evident that the coir pith is in raw or natural form which is different from coir fibre, which is the other product extracted from the coconut husk as stated by the Applicant supplied in the form of blocks, briquette and in loose form(Dust).
  • Therefore, the product is more appropriately covered under the Heading 53050040. The rate of tax under GST is prescribed under Notification no. OI /2017 – C.T. (Rate) dated 28.06.2017 as amended and the exemptions are given vide Notification No. tJ2l2OI7-C.T. (Rate) dated’28.06.2017 as amended.
  • From the above, it can be concluded that only “coir fibre” was covered under the exemption upto 25th July 2OI8. Thereafter “coir pith compost other than those put up in unit container and bearing a registered brand name/brand name” alone is added to the exemption list.
  • The products in question are coir pith in raw form which is either sold as loose form or supplied by the applicant in Blocks, Briquettes form without any addition of chemicals. It is different from coir fibre. Further, the coir pith supplied by the Applicant does not undergo composting process, which would alter its composition and cannot be called as coir pith compost.
  • Hence coir pith in its raw form whether in loose powder or compressed into blocks form are taxable at
  • In view of the foregoing, Authority ruled that Coir pith in its raw form whether in loose powder or compressed into blocks form without any addition of chemicals supplied by the applicant are taxable at @5% and it is not exempt.

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