Applicability of GST on by-products of milling of Dal/ Pulses: Chilka, Churi & Khanda; cattle feed

This clarification is legally unsustainable.

By-products of milling industry attract 5% GST rate, except cattle feed.

S. No. 103A of Schedule I of notification No. 1/2017-Central Tax (Rate), :
Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants [other than aquatic feed including shrimp feed and prawn feed, poultry feed and cattle feed, including grass, hay and straw, supplement and husk of pulses, concentrates and additives, wheat bran and de-oiled cake]


S. No. 102 of notification No. 2/2017-Central Tax (Rate), dated the 28th
June, 2017:
Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake[other than rice bran]

It has been clarified vide Circular No. 179/11/2022-GST, dated 3rd August, 2022 that The dispute in applicable GST rate revolves around the central argument as to whether
the above-mentioned by-products are meant for direct consumption as cattle feed and
therefore attract exemption under S. No. 102 of notification No. 2/2017-Central Tax (Rate) dated 28th June, 2017 or are otherwise not meant for direct consumption and thus
covered under S. No. 103A of notification No. 1/2017- Central Tax (Rate) dated 28th
June, 2017 attracting a GST rate of 5%.

While milling of pulses/ dal, a wide range of by-products such as chilka, khanda, churi,
among others, are obtained which are preferred as cattle feed by dairy industry for better
palatability and higher nutritive value. The above mentioned by-products are required to go through varying degrees of processing in order to customize the color, size, aroma,
nutrition, purity, etc., of the cattle feed so produced, depending upon the dietary and
nutritional requirement of the cattle and the budget availability of the customer(s).
Further, as per the Indian Standards 2052:2009 -Compounded Feeds for Cattle —
Specification, issued by the Bureau of Indian Standards, Ministry of Consumer Affairs,
Food & Public Distribution, Government of India, grain by-products have been
categorized as one of the ingredients of the compounded cattle feed.

Accordingly, it is hereby clarified that the subject goods which inter alia is used as cattle
feed ingredient are appropriately classifiable under heading 2302 and attract GST at the
rate of 5% vide S. No. 103A of Schedule-I of notification no. 1/2017-Central Tax (Rate), dated the 28th June, 2017