GST AAR: 5% Tax Applies to the Supply of Dry Coconut, Copra, & Shell

The Tamil Nadu Authority for Advance Ruling (AAR) ruled GST shall be subjected to be applicable at 5% for supplying the dried Coconut manufactured and supplied by EMS COCO.

The petitioner EMS COCOS is a partnership firm and is involved in the activities of Manufacturing and Trading of Coconut, Copra, and coconut shells, registered under the GST with GSTIN:33AAIFE2739G1ZL.

For the concern that if the dried coconuts (shelled or peeled) used for human consumption would be classified under Chapter 8, HSN 0801, on which the rate of tax was ‘nil’, the petitioner seeks the Advance ruling.

On behalf of the applicant, Vivek Sharma said that coconut was purchased from farmers in Tamil Nadu and Kerala. Moreover, he claimed that they did not have an oil extraction plant but did provide copra for both human use and oil extraction. Moreover, the applicant has already used a 5% tax rate for milling both copra and edible oils.

The Coimbatore Commissionerate official in charge said that the copra dried in the mill’s backyard by the sun was dry fruit or edible food that could be consumed by humans and could not be classed under category 0801.

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The Authority for Advance Ruling of R. Gopala swami (Additional Commissioner) and N. Usha (Joint Commissioner) sees that the finance ministry circular 163/1923 GST ruled that, “The whole unbroken kernel could be taken out of the shell only when it converts to copra. The Applicant takes the copra cut into half, the sun dries and segregates manually based on the round shape of the copra, free of dirt/dust and sends it as edible copra and the rest of the copra which are irregularly shaped, dusty sent to oil milling units. But as the Circular clearly states, Copra is classified under heading 1203 irrespective of use.”

As the impugned goods of the petitioner were only Copra and that would be categorized under Heading 1203 the authority carried that a GST rate of 5% would be subjected to be applied by entry at SL.No. 66 of Schedule I of 1/2017-Central Taxes (Rate) dated 28.06.2017.