GST rate for Fertilisers and Organic Manure

GST rate for Fertilisers and Organic Manure has been important for agriculture sector as they are one of the major farm supplies. There have been instances of confusion regarding the GST rate and HSN code for different varieties of fertilisers and Organic Manure. Chapter 31 of HS Nomenclature addresses the series of HS code for various types of fertilisers.

Also recently advance ruling was pronounced by Rajasthan Authority For Advance Ruling GST that Bio-fertilisers are also covered in Chapter Heading 3101 as they are made up of animals(micro-organism).

Heading 3101 has been placed at two places in GST Rate Schedule. One in Schedule I of Notification No.1/2017-Central Tax (Rate) bearing the tax rate of 5% ( 2.5% CGST + 2.5% SGST) and the other in Notification No.2/2017-Central Tax (Rate) with nil rate of tax . The difference lies as to whether the product has been put up in a container and bears the registered brand name or not. Description provided in both the places is as provided below:

Notification No. Description for heading 3101 Tax Rate (GST)
Notification No.2/2017-Central Tax (Rate) All goods and organic manure [other than those put up in unit container and,-
(a) bearing a registered brand name; or
(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 I]]∗		 Nil
Notification No.1/2017-Central Tax (Rate) All goods i.e. animal or vegetable fertilisers or organic fertilisers put up in unit containers and bearing a brand name 5%

∗ Amended vide Notification No. 28/2017-Central Tax (Rate)

So, fertilisers falling under Heading 3101 shall be taxable or exempt depending upon how the product is being sold and there is no difference in terms of its composition.

In advance ruling  RAJ/AAR/2018-19/04 Dated 16-06-2018 also, the same fact has been replicated. The advance ruling was requested by Rhizo Organic, Hanumangarh.

Meaning of Registered Brand Name

One basic question arises here that what is meant by registered brand name. The term “Registered brand name” was initially explained in Notification No.1/2017-Central Tax (Rate) which was later on amended by Notification No. 27/2017-Central Tax (Rate) by substituting it with the following:

(a) The phrase “brand name” means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or  writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person.

(b) The phrase “registered brand name” means,-
(A) a brand registered as on the 15th May 2017 under the Trade Marks Act, 1999. irrespective of whether or not the brand is subsequently deregistered;

(B) a brand registered as on the 15th May2017 under the Copyright Act, 1957(14 of 1957;

(C) a brand registered as on the 15th May2017 under any law for the time being in force in any other country.

Table depicting other HS codes and GST rate has been provided below:

HS Code Description Tax Rate (GST)
3102 Mineral or chemical fertilisers, nitrogenous, other than those which are
clearly not to be used as fertilizers		 12%
3102 Mineral or chemical fertilisers, nitrogenous, other than those which are
clearly not to be used as fertilizers		 18%
3103 Mineral or chemical fertilisers, phosphatic, other than those which are
clearly not to be used as fertilizers		 12%
3103 Mineral or chemical fertilisers, phosphatic, which are clearly not to be
used as fertilizers		 18%
3104 Mineral or chemical fertilisers, potassic, other than those which are
clearly not to be used as fertilizers		 12%
3104 Mineral or chemical fertilisers, potassic, which are clearly not to be
used as fertilizers		 18%
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		 12%
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		 18%

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