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5% GST applicable on Distillery Wet Grain and Distillery Dry Grain Soluble sold as Cattle Feed: AAR

The Telangana State Authority for Advance Ruling ( AAR ) has held that Distillery Wet Grain Soluble (DWGS) and Distillery Dry Grain Soluble (DDGS) sold as Cattle feed attracts 5% GST. The applicant, M/s. Allied Blenders and Distillers Private Limited are primarily engaged in manufacture of alcohol. In the process of manufacturing alcohol, the applicant produces certain bye-products by names distillery dry gain soluble (DDGS) and distillery wet grain soluble (DWGS). It is contended by the applicant that these are sold only as cattle feed as they have no other ‘known commercial uses’. It is their assertion that they are exempt from tax under GST. Hence this application is made before AAR for clarifying that DWGS and DDGS – ‘Cattle feed’ undertaken by the applicant is covered under serial no 102 of Notification No. 02/2017 – Central Tax (Rate) and these commodities are exempt from payment of GST.

The applicant’s submitted that their bye-products i.e., DWGS and DDGS are used only as cattle feed and therefore have to be classified under S.No.102 of Notification No. 02/2017. It is observed that the Notification No. 01/2017 classifies ‘brewing or distillery dregs and waste’ at S.No.104 under tariff item ‘2303’ and the rate applicable is 5% on these products.

The Coram of Sri B. Raghu Kiran, IRS, Additional Commissioner (Central Tax) and Sri S.V. Kasi Visweswara Rao, Additional Commissioner (State Tax) has held that “It is seen that the chapter headings of the tariff items which qualify as cattle feed at the S.No.102 of Notification No. 02/2017 do not include the HSN ‘2303’. Thus S.No.102 of Notification No. 02/2017 specifically excludes ‘brewing or distillery dregs and waste’. As seen from the averments submitted by the applicant the DWGS and DDGS are clearly falling under ‘brewing or distillery dregs and waste’ and therefore under tariff item HSN No. ‘2303’. Hence these are excluded from the exemption Notification No. 02/2017 and are taxable at the rate of 5%”.

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