2024-VIL-417-GUJ
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SGST High Court Cases

GST - Applicable rate of GST on “mango pulp” – Discharge of 5% GST considering “mango pulp” as per the Entry 30A of Schedule – II (“mango sliced and dried”) of Notification No.1/2017-CT(Rate) - Issue of notice on the ground that “mango pulp” is classified in Tariff Item 0804 50 40 and liable to 18% GST rate from 1st July 2017 to 17th July 2022 by virtue of residuary Entry No.453 of Schedule – III of Notification No.1/2017-CT(Rate) – Validity of retrospective application of CBIC circular dated 3rd August 2022 - whether the impugned circular dated 03.08.2022 is ultra vires to the rate Notification – HELD - considering the sequence of events which have taken place from 1st July 2017 to 18th July 2022, there was no rate prescribed for “mango pulp” either in the Notification No.1/2017-CT(Rate) or Notification No.2/2017-CT(Rate) - “Mango pulp” cannot be said to be a fresh mango. Therefore, it has to be either sliced or dried mango, but, as per clarification made by the GST Council in its 47th meeting held on 28th June 2022, it was clarified that the third category of mangoes other than fresh and dried mangoes is required to be inserted and accordingly, by Notification No.6/2022-CT(Rate), Entry No.16 is inserted for mangoes other than sliced and dried, which includes “mango pulp” attracting GST rate of 12% - for all purposes and intention Entry of rate of 12% would govern the product “mango pulp”, which was not specifically included in Entry No.30A, which provides for mango sliced, dried - The impugned circular dated 3rd August 2022 only clarifies the insertion of Entry No.16 vide Notification No.6/2022 and therefore, the argument and contention raised by the petitioner that by the impugned circular, the GST rate of 12% sought to be introduced is without any basis - the impugned Notification and circular are not in the nature of amending the tax rate with increasing the tax rate with retrospective effect. In fact, they are clarificatory so far as the product “mango pulp” is concerned, as admittedly, Entry No.30A does not include the “mango pulp” - the stand of the respondents that “mango pulp” would fall in the residuary category as the same was not included either in the Notification No.1/2017 or covered by the Entry No.30A is also not as per clarification made by the GST Council. Therefore, the respondents are also not justified to apply rate of 18% GST as per residuary as “mango pulp” would be falling under HSN 0804, which broadly categorized fresh and dried mangoes - The contention of the petitioners is that in absence of Entry No.16 in Schedule – II, the petitioners cannot be charged with GST at 12%, which is also not tenable because from 1st July 2012 to 12th October 2017 the petitioners were liable to pay GST at the rate of 12% on mango pulp - The contention of the petitioners that there was an amendment to the rate Notification with effect from 18th July 2022 is not tenable. As such the Notification is only clarificatory and would apply with effect from 1st July 2017 as per Notification No.1/2017 - “mango pulp” would fall under the third category of “mangoes (other than mango sliced, dried)” would be liable to levy at the rate of 12% - The impugned notice is quashed and set aside and the petitioners would be liable to pay GST at the rate of 12% from 1st July 2017 on the product “mango pulp” and not at the rate of 5% (as claimed by the petitioners) or 18% (as claimed by the respondents) for the period from 01.07 2017 to 18.07.2022 – the petition is partly allowed - Power to Amend Rate Notification - It is true that Section 9 of the CGST Act does not grant power to amend the rate Notification. However, in the facts of the case, as analyzed above, the GST Council has only clarified that mangoes (other than mangoes sliced, dried) would attract GST rate at 12% and not 5% and hence, it cannot be said that there is amendment of rate of GST from 5% to 12% by the impugned Notification as well as the circular. The contention of the petitioner that as per HSN 0804, “mango pulp” would be covered by mangoes as per General Chapter Note, which includes fruits and dates, and therefore, only mangoes other than fresh mangoes is required to considered and as “mango pulp” is not a fresh mango and would be covered by entry no.30A “mango sliced, dried” is not tenable in view of clarification made by the GST Council in its 47th meeting, wherein it is clearly mentioned that only “mangoes sliced, dried” would attract GST at 5% and remaining mango would be attracted GST at 12% - the Notification No.6/2022 is only inserting the word “mango” other than mango sliced, dried so as to clarify that all mangoes would fall in the same category other than “mango sliced, dried”.
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