Distillery Wet/Dry Grain Soluble Sold As Cattle Feed Attracts 5% GST: AAR

The Telangana Authority of Advance Ruling (AAR) consisting of Raghu Kiran (Central Tax) and S.V. Kasi Visweswara Rao (State Tax) has ruled that 5% Goods and Service Tax (GST) is payable on distillery wet/dry grain soluble which is sold as cattle feed.

The applicant is in the business of manufacturing alcohol. In the process of manufacturing alcohol, the applicant produces certain bye-products known as distillery dry grain soluble (DDGS) and distillery wet grain soluble (DWGS).

The applicant submitted that DDGS and DWGS were sold only as cattle feed as they have no other 'known commercial uses'.

The applicant has sought advance ruling on the issue whether the sale of produces Distillery Wet Grain Soluble and Distillery Dry Grain Soluble as a 'Cattle feed' undertaken by the applicant is covered under serial no 102 of Notification dated 28 June 2017 and whether these commodities are exempt from payment of GST.

The AAR has observed that the Notification No. 01/2017 classifies 'brewing or distillery dregs and waste' at S.No.104 under tariff item '2303' and the GST rate applicable is 5% on these products.

The Authority ruled 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'. The DWGS and DDGS clearly falls 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.

Applicant's Name: M/s. Allied Blenders and Distillers Private Limited

Citation: TSAAR Order No.14/2022

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