Chapter 31 - Fertilisers

Notes

This Chapter does not cover:
1. animal blood of heading 0511;
2. separate chemically defined compounds [other than those answering to the descriptions in Note 2(a), 3(a), 4(a) or 5 below]; or
3. cultured potassium chloride crystals (other than optical elements weighing not less than 2.5 g. each, of heading 3824); optical elements of potassium chloride (heading 9001).
Heading 3102 applies only to the following goods, provided that they are not put up in the forms or packages described in heading 3105:
1. goods which answer to one or other of the descriptions given below:
  1. sodium nitrate, whether or not pure;
  2. ammonium nitrate, whether or not pure;
  3. double salts, whether or not pure, of ammonium sulphate and ammonium nitrate;
  4. ammonium sulphate, whether or not pure;
  5. double salts (whether or not pure) or mixtures of calcium nitrate and ammonium nitrate;
  6. double salts (whether or not pure) or mixtures of calcium nitrate and magnesium nitrate;
  7. calcium cyanamide, whether or not pure or treated with oil;
  8. urea, whether or not pure;
2. fertilisers consisting of any of the goods described in (A) above mixed together;
3. (c) fertilisers consisting of ammonium chloride or of any of the goods described in (A) or (B) above mixed with chalk, gypsum or other inorganic non-fertilising substances;
4. liquid fertilisers consisting of the goods of sub-paragraph (A) (ii) or (viii) above, or of mixtures of those goods,in an aqueous or anunoniacal solution.
Heading 3103 applies only to the following goods, provided that they are not put up in the forms or packages described in beading 3105:
1. (a) goods which answer to one or other of the descriptions given below:
  1. basic slag;
  2. natural phosphates of heading 2510, calcined or further heat-treated than for the removal of impurities;
  3. superphosphates (single, double or triple);
  4. (iv) calcium hydrogen orthophosphate containing not less than 0.2 per cent. by weight of fluorine calculated on the dry anhydrous product;
2. fertilisers consisting of any of the goods described in (A) above mixed together, but with no account being taken of the fluorine content limit;
3. fertilisers consisting of any of the goods described in (A) or (B) above, but with no account being taken of the fluorine content limit, mixed with chalk, gypsum or other inorganic non-fertilising substances.
Heading 3104 applies only to the following goods, provided that they are not put up in the forms or packages described in heading 3105:
1. goods which answer to one or other of the descriptions given below:
  1. crude natural potassium salts (for example, carnallite, kainite and sylvite);
  2. potassium chloride, whether or not pure, except as provided in Note 1(C) above;
  3. potassium sulphate, whether or not pure;
  4. magnesium potassium sulphate, whether or not pure;
2. (b) fertilisers consisting of any of the goods described in (A) above mixed together.
Ammonium dihydrogen orthophosphate(monoammonium phosphate) and diannrionium hydrogen orthophosphate (diammonium phosphate) whether or not pure, and intermixtures thereof, are to be classified in heading 3105.
For the purposes of heading 3105, the term "other fertilisers" applies only to products of a kind used as fertilisers and containing, as an essential constituent, at least one of the fertilising elements nitrogen, phosphorus or potassium.

GST Rates of Goods

Chapter Heading	Description	Rate of GST	Schedule	Sr.No
3101	All goods i.e. animal or vegetable fertilisers or organic fertilisers put up in unit containers and bearing a brand name.	5%	I	182
3102	Mineral or chemical fertilisers, nitrogenous, other than those which are clearly not to be used as fertilizers	5%	I	66<sup>1</sup>
3103	Mineral or chemical fertilisers, phosphatic, other than those which are clearly not to be used as fertilizers	5%	I	67<sup>1</sup>
3104	Mineral or chemical fertilisers, potassic, other than those which are clearly not to be used as fertilizers	5%	I	68<sup>1</sup>
3105	3105 Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg, other than those which are clearly not to be used as fertilizers	5%	I	69<sup>1</sup>
3102	Mineral or chemical fertilisers, nitrogenous, other than those which are clearly not to be used as fertilizers	5%	I	182A<sup>1</sup>
3102	Mineral or chemical fertilisers, nitrogenous, which are clearly not to be used as fertilizers	5%	I	42
3103	Mineral or chemical fertilisers, phosphatic, other than those which are clearly not to be used as fertilizers	5%	I	182B<sup>1</sup>
3103	Mineral or chemical fertilisers, phosphatic, which are clearly not to be used as fertilizers	5%	I	43
3104	Mineral or chemical fertilisers, potassic, other than those which are clearly not to he used as fertilizers	5%	I	182C<sup>1</sup>
3104	Mineral or chemical fertilisers, potassic, which are clearly not to be used as fertilizers	5%	I	44
3105	Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg; other than those which are clearly not to be used as fertilizers;	5%	I	182D<sup>1</sup>
3105	Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg, which are clearly not to be used as fertilizers	5%	I	45
3101	All goods and organic manure [other than put up in unit containers and bearing a registered brand name]	0%	-	108
3101	All goods and organic manure [other than those put up in unit container and,—<br> (a) bearing a registered brand name; or <br>(b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily, subject to the conditions as in the ANNEXURE]]	0%	-	108

Other Exemptions

Description	Notification
Exemption from Registration - Small Taxpayers having turnover below threshold limit	Notification No. 10/2019-C.T., dated 7-3-2019
Composition Levy Scheme for Small Taxpayers having Turnover Up to Rs. 1.5 Crore — Old Scheme	Notification No. 8/2017-C.T., dated 27-6-2017
Composition Levy Scheme for Small Taxpayers having Turnover up to Rs. 1.5 Crore — New Scheme	Notification No. 14/2019-C.T., dated 7-3-2019
Scheme to Pay GST 0 6% - For Taxpayers having turnover less than Rs. 50 Lakhs and Not Eligible for Composition Scheme.	Notification No. 2/2019-C.T. (Rate), dated 7-3-2019
Exemption to Specified Goods supplied to Specified Recipients for Petroleum Exploration etc.	Notification No. 3/2017-Central Tax (Rate), dated 28-6-2017]
Exemption to Goods Supplied to CSD by way of Refund	Notification No. 6/2017-Central Tax (Rate), New Delhi, dated 28-6-2017.
Exemption to goods supplied by CSD	Notification No. 7/2017-Central Tax (Rate), New Delhi, dated 28-6-2017
United Nation, International Organisation and Foreign Diplomatic Mission Notified as Entitled for refund of GST Paid on supplies received.	Notification No. 16/2017-Central Tax (Rate), dated 28-6-2017
Reduced GST on Supply of Goods to Exporter	Notification No. 40/2017-CT. (Rate), dated 23-10-2017
Concessional GST on Supply of Scientific and technical equipment to research institutions	Notification No. 45/2017-C.T. (Rate), dated 14-11-2017

Departmental Clarifications / Case Law

Anaerobic Microbial lnoculums (AMI)

Anaerobic Microbial lnoculums (AMI)' - 'Anaerobic Microbial Inoculums (AMI) i.e. Animal Dung' is nothing but an 'organic manure i.e. organic fertiliser' which is generally used in Bio -toilets set up in Railways coaches, known as `DRDO inoculums bacteria`.and as organic manure- classified under chapter sub-heading 3101 00 99- In Re: Elefo Biotech Pvt. Ltd., 2019 (23) G.S.T.L. 145 (A.A.R. - GST).

Fertilizer

Fertilizer - In the GST regime, tax structure on fertilizers has been prescribed on the lines of pre-GST tax incidence. The wording of the GST notification is similar to the central excise notification except certain changes to meet the requirements of GST. These changes were necessitated as GST is applicable on the supply of goods while central excise duty was applicable on manufacture of goods. Accordingly, fertilizers falling under heading 3102, 3103, 3104 and 3105, other than those which are clearly not to be used as fertilizers, attract 5% GST [S. No. 182A to 182D of the First schedule to the notification No. 1/2017-Central Tax (Rate), dated 28-6-2017]. However, the fertilizers items falling under the above mentioned headings, which are clearly not to be used as fertilizer attract 18% GST [S. No. 42 to 45 of the III schedule to the notification No. 1/2017-Central Tax (Rate)]. The intention has been to provide concessional rate of GST to the fertilizers which are used directly as fertilizers or which are used in the manufacturing of complex fertilizers which are further used as soil or crop fertilizers. The phrase `other than clearly to be used as fertilizers` would not cover such fertilizers that are used for making complex fertilizers for use as soil or crop fertilizers. C.B.I. & C. Circular No. 54/28/2018-GST, dated 9-8-2018.

Tile Adhesive and Tile Grout

Tile Adhesive and Tile Grout - HSN Code 32.14 included `preparations in powder form based on quartz and cement with small quantities of added plasticizers, used for instance, after adding water, for setting wall or floortiles` - Polymers used in said products acts as plasticizers - Tile Adhesive specifically used for setting tiles,whether on floor, walls or other tiles, etc.—Tile grout being compound used as joint filler between tiles used for setting wall/floor tiles because same is used between two tiles as an adhesive by way of filling gap between two tiles so that the tiles become attached to each other - Products classifiable under Entry 24 of Schedule IV of Notification No.1/2017-C.T. (Rate), dated 28-6-2017 liable to GST @ 28%. In Re: Asian Paints Ltd, 2019 (21) G.S.T.L. 338 (AAR-GST).

Tile Adhesive and Joint Filler

Tile Adhesive and Joint Filler- Applicant claims that the product manufactured such as Tile Adhesive and Joint Filler is a mixture of natural products, whereas the putty is a material with high plasticity and used extensively for glazing. The prepared binders for foundry modules or cores; chemical products and preparation of the chemical or allied industries including those consisting of mixtures of natural products, not elsewhere specified or included, come under HSN 3824. However assessing authority pointed out that this item will come under HSN 3214, which stands for glaciers putty, grafting putty, resign cement, caulking compound etc. The product is manufactured by mixing natural products like silica sand, dolomite powder, cement and chemicals. The firm has obtained mining lease license from Mining & Geology Department for manufacturing value addition products like tile adhesive, joint filler etc. from silica sand. The product is manufactured by mixing natural products like silica sand and dolomite powder with cement and chemicals and would, therefore, come under the classification 'prepared binder'.specified under HSN 3824 which is taxable @ 18% GST. In Re: New RV Enterprises 2018 (18) G.S.T.L. 108 (A.A.R. - GST).

Calcium Nitrate Fertilizer

Calcium Nitrate Fertilizer is separate chemically defined compound covered under CTH 2834.29 and not as fertilizer under Chapter 31- Commissioner v Pioneer Agritechnoscan & Exports Pvt. Ltd.- 2007 (210) ELT 680 (Tri .-Mumbai).

Potassium Nitrate of Grade 13.0-45 Priled

Potassium Nitrate of Grade 13.0-45 Priled has been mentioned in the Fertilizer (Control) Order. This fact establishes that the goods imported by the appellant are essential fertilizer and not Potassium Nitrate simpliciter, as a separately defined chemical compound. The prime factor required to be decided is as to whether the goods imported by the appellants are Potassium Nitrate in the shape of separate chemically defined compounds or the same, by presence of Sodium and Chlorine, has been converted into a fertilizer. We agree with the submission of the learned JDR that if the Potassium Nitrate, as a separate chemically defined compound, has been imported by the appellant, then the fact that the same has been used as fertilizer will not take it away from Chapter 28 and put the same under Chapter 28 inasmuch as Chapter 28 specifically mentions Potassium Nitrate. But as already discussed, the goods imported by the appellants are not Potassium Nitrate as a separate chemically defined compound, but are fertilizer, Accordingly, we hold that the Potassium Nitrate Grade 13-0-45 Prilled imported by the appellant, is properly classifiable under Chapter 31. Assam Company Limited v Commissioner 2001 (133) ELT 110 (Tri.-Kolkata). This judgment was maintained by Hon'ble Supreme Court.