Fertiliser mixture

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RENGARAJ R.K

ADVOCATE

7557 Points Joined October 2010

Even after 4 months of Central budget, there is no claritty about the excisability of Fertiliser Mixture (combination of all chemical fertilisers). Some of the fertiliser mixing units say it is excisable and started paying 1% excise duty under chapter heading no.3105, some say it is not... The deparment is watching and not replying in writing. While individual chemical fertilisers are brought to excise in the central budget @ 1% without CENVAT and 5% with CENVAT, we need clarity whether the mixture of such fertilisers is excisable?

Can somebody throw some light on the subject matter.

rengaraj .r.k

Replies (2)

CA Unnikrishnan Nair N

Chartered Accountant

2083 Points Joined February 2011

Department was not very keen on pursuing the question as to whether mixing of fertiliser amounts to manufacture for the reason that eventhough it amounts to manufacture the resultant goods stands exempted. But from 01-03-2011 fertilisers attracts duty @ 1%. Now the question can heat up because of the revenue impact and once it pops up , it can only be settled only at Supreme court level. I feel that eventhough there is no chemical change takes place in mixing, the resultant product is commercially different from the point of view of the users and hence the possibility of same being held as amouning to manufacture cannot be rules out.