Classification of goods— In the instant case, the applicant is 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.

Following question is raised for advance ruling—

Whether the sale of produces Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘DDGS’) – ‘Cattle feed’ undertaken by the applicant is covered under serial no 102 of Notification No. 02/2017 – Central Tax (Rate) dated 28 June 2017 and whether these commodities are exempt from payment of GST?

The applicant’s chief argument is that their bye-products i.e., Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘DDGS’) are used only as cattle feed and therefore have to be classified under S.No.102 of Notification No. 02/2017.

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 Distillery Wet Grain Soluble (‘DWGS’) and Distillery Dry Grain Soluble (‘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.'

Held that— Both the commodities fall under S.No.104 of Notification No. 01/2017 and are taxable at the rate of 5%.