GST Daily – Editorial Team
Dear Reader,
Today’s newsletter analytically summarizes the top GST stories reported at taxmann.com.
The appellant was engaged in the business of manufacturing and trading of a product viz. papad of different shapes and sizes. It sought advance ruling to determine under which Tariff Heading papad of different shapes and sizes manufactured and supplied by it would be covered and its taxability. The Authority for Advance Ruling ruled that the appellant's product, i.e., papad of different shapes and sizes is not papad but is un-fried fryums and the said product would be classifiable under Tariff No. 2106 90 99 of the Customs Tariff Act, 1975 and taxable at 18%. It filed appeal against the ruling and contended that its product papad of different shapes and sizes is neither fully cooked nor in ready to eat condition and would be eligible to be classified under Tariff No. 1905 and exempt from GST. ? ? ?
The Appellate Authority observed that in entry at Sl. No. 96 of the Notification No. 2/2017 - Central Tax (Rate), dated 28-6-2017 the description of the product is papad by whatever name called. To understand the term 'whatever name called' the principle of Noscitur a sociis is to be applied. As per the said principle, the meaning of an unclear word or phrase must be determined by the words that surround it. Therefore, in this entry only a product called by name of Papad would not be covered but all types of product which are similar to Papad in respect of ingredient, manufacturing process, use and common parlance would be covered irrespective of their shapes and sizes and even name. Therefore, the impugned product, i.e. different shapes and sizes of papad would be eligible to be covered under Entry at Sl. No. 96 of Notification No. 2/2017 - Central Tax (Rate), dated 28-6-2017 and exempt from GST.
The CBIC recently has issued an instruction for its officers on applying the recent judgment of the Supreme Court in the case of Westinghouse Saxby Farmer Ltd. [2021] 125 taxmann.com 243 (SC) for the classification ‘Auto parts’. In this document, the Taxmann’s Indirect Tax Research and Advisory Team has analysed the given judgment and the CBIC instruction. ? ? ? ? ?
Important research points covered: ? ? ? ? ?
a) Background of Westinghouse judgment of Supreme Court (Supra)
b) Instruction issued by CBIC
c) Relevance of HS Explanatory notes in classification
d) Impact of filing review petition on the classification of auto parts
Link of the judgment: https://cutt.ly/tIrdbT2 ? ? ?
Link of the instruction: https://cutt.ly/FIrdWuP
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