Supply of Copra liable for GST at the rate of 5%- CBIC Clarification
In an application for advance ruling before the Tamil Nadu Authority for Advance Ruling (AAR), the applicant sought advance ruling as to whether the dried coconuts (shelled or peeled) used for human consumption would be classified under Chapter 8, HSN 0801 on which rate of tax was ‘nil’.
The Authority for Advance Ruling observing the finance ministry circular 163/19/2021 GST held 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, sun dries and segregates manually based on the round shape of copra, free of dirt/ dust and sends it as dibble copra and the rest of copra which are irregularly shaped, dusty are 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 applicant was only Copra and the same would be classified under Heading 1203, the Authority held that GST rate of 5% would be applicable by entry at Sl. No. 66 of Schedule I of 1/2017- Central Tax (Rate) dated 28.06.2017.
Now let’s read the circular clarifying GST rates on Copra- Circular No. 163/19/2021-GST
- Representations have been received seeking clarification regarding the definition of Copra and applicable GST rates.
- As per Explanatory Notes to HS (2017 edition) to heading 1203, Copra is dried flesh of coconut generally used for the extraction of coconut oil. Coconut kernel turns into copra, when it separates from the shell skin, while still being inside the shell. The whole unbroken kernel could be taken out of shell only when it converts to Copra. Once taken out of shell, Copra could be supplied either whole or broken.
- As per the Explanatory Notes to HS, the heading 0801 covers coconut fresh or dried but excludes Copra. Thus, exemption available to Coconut, fresh or dried, whether or not shelled or peeled, vide entry at Sl. No. 47 of notification no. 2/2017- Central Tax (Rate) dated 28.06.2017, is not available to Copra.
- Accordingly, Copra, classified under heading 1203, attracts GST rate of 5% vide entry at Sl. No. 66 of Schedule I of 1/2017- Central Taxes (Rate) dated 28.06.2017, irrespective of use.
Source: CBIC Circular & AAR Ruling
