Product Fish meal is exempt from GST as exemption provided by Notification can’t be taken away by issuing Circular: HC

Case Details: Jenefa India v. Union of India - [2021] 132 taxmann.com 55 (Madras)

Judiciary and Counsel Details

• • R. Suresh Kumar, J.
  • Joseph Prabakar for the Petitioner. 

    K. Prabhu, Standing Counsel for the Respondent.

Facts of the Case

The petitioner was a manufacturer of fish meal. In the manufacturing process, the petitioner would procure fresh fish and after processing, it would be converted in powder form of fish meal which would be packed in sacks for sale. It was treated it as exempt goods. The department inspected the premises of the petitioners’ factories and demanded the tax at rate of 5%. The petitioner challenged it and filed writ petition.

High Court Held

The Honorable High Court observed that fish meal in form of finished product used for feeding fish, aqua, including prawn etc., and also flours, meals and pellets of fish etc., in powdered form are exempted and exemption is provided under Sl.No. 102 of Exemption Notification No. 2/2017, dated 28-6-2017. However, a circular was issued to provide that exemption was for finished products and not for raw material. On the basis of this circular, it was alleged that their product fish meal was also used as raw material and exemption would not be available. It was noted that GST Exemption provided by issuing Exemption Notification cannot be taken away by issuing clarificatory Circular and therefore, the petitioners, so long as they would make a finished product fish meal from their manufacturing units, can enjoy benefit of exemption.