Chapter 35 - Albuminoidal substances; modified starches; glues; enzymes

Notes

1.This Chapter does not cover:

(a) yeasts (heading 2102);
(b) blood fractions (other than blood albumin not prepared for therapeutic or prophylactic uses), medicaments or other products of Chapter 30;
(c) enzymatic preparations for pre-tanning (heading 3202);
(d) enzymatic soaking or washing preparations or other products of Chapter 34;
(e) hardened proteins (heading 3913); or
(f) gelatin products of the printing industry (Chapter 49).

2. For the purposes of heading 3505, the term "dextrins" means starch degradation products with a reducing sugar content, expressed as dextrose on the dry substance, not exceeding 10%. Such products with a reducing sugar content exceeding 10% fall in heading 1702

GST Rates of Goods

Chapter Heading	Description	Rate of GST	Schedule	Sr.No
3501	Casein, caseinates and other casein derivatives; casein glues	18%	III	64
3502	Albumins (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter), albuminates and other albumin derivatives	18%	III	65
3503	Gelatin (including gelatin in rectangular (including square) sheets, whether or not surface-worked or coloured) and gelatin derivatives; isinglass; other glues of animal origin, excluding casein glues of heading 3501	18%	III	66
3504	Peptones and their derivatives; other protein substances and their derivatives, not elsewhere specified or included; hide powder, whether or not chromed; including Isolated soya protein	18%	III	67
3505	Dextrins and other modified starches (for example, pregelatinised or esterified starches); glues based on starches, or on dextrins or other modified starches	18%	III	68
3506	Prepared glues and other prepared adhesives, not elsewhere specified or included; products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg	18%	III	69
3207	Enzymes, prepared enzymes	18%	III	70

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. 32017-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

Adhesive Neoprene (Neoprene Cement)

used as an adhesive in the manufacture of footwear — by virtue of its chemical composition, physical form, function and application will not merit consideration as 'Mastics' under Heading No. 32.14 of the C.E.T. and it is appropriately classifiable as "Prepared glues and other prepared adhesives" under Heading No. 35.06 of the Central Excise Tariff. - Circular No. 2/92-CX.3, dated 5-3-1992.

Adhesive

If an item is sold in two sets consisting of two or more separate constituents, some or all of which fall in Sections VI or VII and the goods are intended to be mixed together to obtain a product falling under Sections VI or VII, then that product has to be classified in the appropriate heading of that product. In this case, admittedly the goods are •sold in two sets one set being a polyurethanes resins and the other set being polyisocyanate. The polyurethane resin falls under T.I. No. 3909.60. When the above products are mixed together they become adhesives which is a product falling in T.I. No. 35.06. Commissioner v Converter Adhe & Chemicals (P) Ltd. 2006 (199) ELT 194 (SC)

Binding Agent

Binding Agents consists of acrylic binder silicone antifoam, wetting agent, ammonium hydroxide, ammonium chloride and water. It is stated used for binding non-woven webs during the course of manufacture of non-woven fabrics. The product under reference is stated to find use in binding webs of non-woven fabrics. Binding "webs" during the course of manufacture of non-woven fabrics is, therefore, part of manufacture of non-woven fabrics. It cannot be considered as a "process' or finishes". "Process" and "Finishes" are those described under Note 'A' to heading 38.09, from (1) to (13). Secondly, it has been argued that unless a product is suitable for use as glue or adhesives, put up for retail sale as glue or adhesives, not exceeding a net weight of 1 Kg. cannot be classified under heading 35.06. However, heading 35.06 of C.E.T. refers to only "Prepared glues and other prepared adhesives, not elsewhere specified". The word "suitability for use as glues and adhesives and being put in a unit container of weight not exceeding 1 Kg" are not mentioned in the Central Excise Tariff.. In the instant case product is used as an adhesive for binder textile fibres. In view of the foregoing the product would more appropriately by covered under heading 35.06 of C. Ex. Tariff Act, 1985. CBEC Circular No. 53/89, dated 20-9-1989.

Latex Based Adhesive

Reading Note 5(b), it becomes clear that the test to distinguish rubber based adhesives and non-rubber based adhesives or other adhesives is the test of composition and not the test of end-user. Generally, in matters of classification "composition test" is an important test and "end-user test" would apply only if the entry say so. Rubber content in the product in question is above 90 per cent. Latex based Adhesives falls under heading '40.01' and not under heading '35.06. Commissioner v Mannampalakkal Rubber Latex Works 2007 (217) ELT 161 (SC)