Facts of the Case

The petitioner, engaged in the manufacture of mango pulp, filed a writ petition before the Andhra Pradesh High Court challenging the levy of GST at the rate of 18% on mango pulp. The petitioner sought a declaration that its product was classifiable under Chapter Heading 0804 50 40 and entitled to exemption under Entry 51 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017.

Earlier, the Authority for Advance Ruling (AAR) had held that mango pulp/puree attracted GST at 18% under Entry 453 of Schedule III of Notification No. 1/2017-Central Tax (Rate). The Appellate Authority for Advance Ruling (AAAR) modified the classification by holding that mango pulp was classifiable under Tariff Item 0804 50 40 but continued to levy GST at 18%.

During the pendency of the writ petition, the Government of India issued a clarification through Circular dated 03.08.2022 regarding the applicable GST rate on various forms of mangoes, including mango pulp.

Issues Involved

  1. Whether mango pulp is liable to GST at 18%.
  2. Whether mango pulp falls under Chapter Heading 0804 attracting GST at 12% in view of the subsequent CBIC clarification.
  3. Whether the Advance Ruling Authorities were justified in levying GST at 18% on mango pulp.

Petitioner’s Argument

  • The petitioner contended that mango pulp is classifiable under Tariff Item 0804 50 40.
  • It was argued that fresh mangoes are exempt from GST and the applicable notification and subsequent CBIC Circular clarified the correct tax treatment of mango pulp.
  • The petitioner relied upon the Government's Circular dated 03.08.2022, which specifically clarified that mango pulp attracts GST at 12% and not 18%.
  • Therefore, the orders of the AAR and AAAR imposing GST at 18% were contrary to the clarification issued by the Government.

Respondents’ Arguments

  • The tax authorities relied upon the orders passed by the Authority for Advance Ruling and the Appellate Authority for Advance Ruling.
  • According to the authorities, mango pulp attracted GST at 18% under Entry 453 of Schedule III of Notification No.1/2017-Central Tax (Rate).
  • They maintained that the levy of GST at 18% was in accordance with the applicable notification prior to the clarification.

Court Order / Findings

The Andhra Pradesh High Court examined the CBIC Circular dated 03.08.2022 issued pursuant to the recommendations of the GST Council.

The Court observed that the Circular categorically clarified:

  • Fresh mangoes falling under Heading 0804 continue to remain exempt from GST.
  • Sliced and dried mangoes attract GST at 5%.
  • All other forms of dried mangoes, including mango pulp, were always intended to attract GST at 12%.

The Court held that the clarification removed all ambiguity regarding the applicable GST rate on mango pulp.

Accordingly, the Court held that the orders of the Appellate Authority imposing GST at 18% were incorrect and declared that mango pulp is liable to GST only at the rate of 12%.

The writ petition was disposed of accordingly.

Important Clarification

  • Mango pulp is classifiable under Tariff Item 0804 50 40.
  • Fresh mangoes remain exempt from GST.
  • Sliced and dried mangoes attract GST at 5%.
  • Mango pulp and other forms of dried mango attract GST at 12%.
  • The CBIC Circular dated 03.08.2022 clarified that the intention was always to levy GST at 12% on mango pulp.
  • Any order levying GST at 18% on mango pulp is not sustainable in light of the Government clarification.

Sections / Notifications Involved

  • Article 226 of the Constitution of India
  • Chapter Heading 0804
  • Tariff Item 0804 50 40
  • Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017
  • Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017
  • Notification No. 6/2022-Central Tax (Rate) dated 13.07.2022
  • CBIC Circular dated 03.08.2022
  • Entry 453 of Schedule III
  • Entry 51 of Notification No. 2/2017-CT (Rate)

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785319740_2216compressed.pdf

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