Rate of tax (goods)— In the instant case, the applicant is engaged in supply of coir pith compost. The Applicant states that he purchases coir pith and then the same is processed and converted into either 'Decomposed coir pith compost' or 'Sterilized coir pith compost' which is used as manure for agriculture and horticultural crops.

The applicant has sought advance ruling in respect of the following questions:-

i. Whether Notification No. 7/2022-Central Tax (Rate), dated 13-07-2022 applies to Coir-Pith Compost (HSN 53050040) mentioned in serial number 132-A of the Notification No.2/2017-Central Tax (Rate) dated 28-06-2017 as amended vide notification No. 19/2018-Central Tax (Rate), dated 26-07-2018?

ii. The registered person sells coir-pith compost in 30 kg and above quantity bags with un-registered brand name "SURYA". In such cases, whether the registered person is liable to tax under the GST Acts?

iii. If the coir-pith compost in 30kg and above quantity bags are sold without any label (in plain bags), whether would it attract GST?

iv. If the registered person sells coir-pith compost in 25 kg and less prepacked and labelled bags to nurseries who buys for consumption, whether in such cases GST is payable?

v. Whether the nurseries, who are un-registered dealers, come under the definition of "Institutional consumers"?

vi. If the registered persons sells coir-pith compost with 30Kg and above pre-packed and labelled bags to nurseries who buys for consumption, whether in such cases GST is payable?

vii. Rule 3(b) of Legal Metrology (Packaged commodities) Rules, 2011, provides that the provisions of Chapter II of that Rules shall not apply to cement, fertilizers and agricultural farm produce sold in above 50 kg bags. Whether the coir-pith compost, which is also the bio-fertilizer, sold by the registered person, falls under this category and exempt from GST?

The Applicant is engaged in supply of coir pith compost. The Applicant states that he purchases coir pith and then it is mixed with urea and gypsum and then the same is processed and converted into either 'De-composed coir pith compost' or 'Sterilized coir pith compost' which is used as manure for agriculture and horticultural crops.

Held that— 

i. Entry 132A of Notification No.2/2017-Central Tax (Rate) dated:28.06.2017 as amended by Notification No. 7/2022-Central Tax (Rate), dated 13-07-2022 applies to Coir-Pith Compost other than pre-packaged and labeled.

ii. If the registered person sells coir-pith compost in 30 kg and above quantity bags with un-registered brand name "SURYA". Then the same is exigible to GST at 5%(CGST @ 2.5% and SGST 2.5%) as per entry No. 215 of Notification No.1/2017-Central Tax (Rate) dated:28.06.2017 as amended further.

iii. Coir-pith compost can't be sold without any label in 30kg as label is mandatory for the pre-packed commodities and thus above quantity bags are also exigible to GST at 5%(CGST @ 2.5% and SGST 2.5%) as per entry No. 215 of Notification No.1/2017-Central Tax(Rate) dated:28.06.2017 as amended further.

iv. If the registered person sells coir-pith compost in 25 kg and less pre-packed and labelled bags to nurseries who buys for consumption, then also the said pre-packed and labelled bags are exigible to GST at 5% (CGST @2.5% and SGST 2.5%) as per entry No. 215 of Notification No. 1/2017-Central Tax(Rate) dated:28.06.2017 amended further.

v. The nurseries, who are un-registered dealers, are not covered under the definition of "Institutional consumers".

vi. If the registered persons sells coir-pith compost with 30Kg and above pre-packed and labelled bags to nurseries who buys for consumption, in such cases GST is payable at 5%(CGST @ 2.5% and SGST 2.5%) as per entry No. 215 of Notification No.1/2017-Central Tax(Rate) dated:28.06.2017 amended further

vii. The coir-pith compost is exempted from GST when sold in above 50 kg bags.