GOVERNMENT OF ANDHRA PRADESH

COMMERCIAL TAXES DEPARTMENT

PROCEEDINGS OF THE

AUTHORITY FOR CLARIFICATION AND ADVANCE RULING

(Under Section 67 of APVAT Act, 2005)

Present : Sri T.Yugandhar Reddy, Addl.Commissioner(VAT)

Sri T.Vivek, Jt.Commissioner (VAT)

Sri K.Raghavaiah, Jt.Commissioner (Audit)

***

CCT’s Ref.No.PMT/P&L/A.R.Com/359/2005 DT. 5-10-2005

Ref:- CCT’s Ref.No.PMT/P&L/A.R.Com/2005, Dt.13.4.2005

O R D E R:

M/s. Sun Food Corporation, Visakhapatnam (TIN No.28250182061) have filed an application on 8.09.2005 and sought clarification and advance ruling on the following items under Section 67 of APVAT Act, 2005 read with Rule 66(2)(i) of APVAT Rules, 2005 alongwith the application fee of Rs.1000/-.

They sought clarification on the following:

Rate of tax on the following items :

i)  Cashew nut shell oil

ii)  Cashew nut shell deoiled cake

iii)  Cashew husk

Sri B.Babu, Manager appeared on behalf of the firm for hearing on 1-10-2005 and explained the case.

The issue has been examined with reference to the provisions of the APVAT Act and Rules and HSN Codes notified by Government vide G.O.Ms.No.398, Revenue (CT.II) Department, Dt.31-03-2005 and G.O.Ms.No.490, Revenue (CT.II) Department, Dt.15-04-2005 as superceded in G.O.Ms.No.1615 Revenue (CT.II) Department, Dt.31.8.2005 and G.O.Ms.No.1596 Revenue (CT.II) Department, Dt.27.8.2005 and the ruling is given as under:

The applicant states that he purchases raw cashew nuts and processes the same into Kernel and obtains certain bye products in the process. The applicant seeks to know the rate of tax applicable to the following products.

(i) Cashew nut shell oil :

According to the applicant it is a vegetable oil obtained from Cashew nut shell and can be considered as vegetable oil and may be liable to tax as specified under Entry 67 of Schedule IV of the A.P.VAT Act.

We have examined the plea of the applicant. Entry 67 reads “vegetable oils – all kinds of vegetable oils including solvent oils and coconut oils”. As Cashew nut shell oil is derived from cashew nut which is a vegetable oil, we are inclined to agree with the plea of the applicant and hold that cashew nut shell oil is liable to tax @ 4% under Entry 67 of Schedule IV of the A.P.VAT Act, 2005.

(ii) Cashew nut shell deoiled cake :

According to the applicant this is a residual cake after obtaining the oil and may be treated as falling under Item 87 of Schedule IV of the A.P.VAT Act.

We have examined the plea of the applicant. Entry 87 reads “oil cakes and deoiled cakes”. As the entry is broad in its sweep it may be construed that all kinds of deoiled cakes fall within the ambit of the entry. Therefore we hold that Cashew nut shell deoiled cake attracts tax @ 4% as per Entry 87 of Schedule IV of the A.P. VAT Act, 2005.

(iii) Cashew husk :

The applicant states that Cashew husk is obtained after decorticating cashew nuts while processing for kernel and further states that this item may fall under Entry 41 of Schedule I of the A.P.VAT Act, 2005.

We have examined the plea. Entry 41 of Schedule I of the Act reads “Husk of Pulses, Paddy, Ground nut and Wheat bran”. As the entry specifies husk of various products, we are unable to agree with the view of the applicant that Cashew husk is also included under the entry. Therefore we hold that Cashew husk falls outside the scope of Entry 41 of Schedule I of the Act and shall fall squarely within the ambit of Schedule V of the Act and liable to tax @ 12.5%.

Addl.Commissioner Jt. Commissioner Jt.Commissioner

Note: An appeal against this proceedings can be filed before the Sales Tax

Appellate Tribunal, A.P., Hyderabad within 30 days of this ruling.

To

M/s. Sun Food Corporation,

Narsingpalli,Kasimkot Mandal,

Visakhapatnam.

Copy submitted to the Commissioner of Commercial Taxes, A.P., Hyderabad.

Copy to the Deputy Commissioner (CT), Visakhapatnam Division.

Copy to the Commercial Tax Officer, Circle.