Cattle Feed HSN Code and GST Rate: A Detailed Guide

HSN is a short definition of the harmonious blend of nomenclature that targets the international community, targeting goods classification as prescribed by WCO. In India, the necessary tax laws regarding the classification and imposition of tax on goods under the Goods and Service Tax (GST) ordered the use of HSN codes for tax compliance. These codes also play significant roles in international trade transactions, customs clearance, and business activities. Cattle feed HSN code GST rate are important aspects for businesses within the livestock and agriculture industry. This article undertakes a technical analysis of HSN code 2306 under the Indian goods and services tax.

‍

HSN Codes in India

India adopted the HSN code system to make its tax structure coherent in light of the GST regime. Taxation on all goods is easy with the presence of the unique HSN code assigned to each item. For instance in Legal Services and Handlings, a proper classification allows for regulation compliance as well as usage of tax benefits. Here is

The Definitions and Components of Cattle Feed

So, here is the HSN related information about HSN Code 2306. Cattle feed means fodder intended for use in animals, especially farm livestock. It consists of such feeds as complete feed, compound feed, and feed additives which are important for the growth, maintenance and production of the cattle. The common constituents include grains, protein meals, oilseed meals, mineral blends, and vitamin concentrates. These nutrients are thus utilized in supporting the dairy and meat industry in India.

The cattle feed market is crucial for India because of the importance of livestock farming in the country. Correct positioning of cattle feed in the applicable HSN code allows players in this market sector to adhere to the provisions of the GST and gain from any tax reliefs that might be available.

Cattle Feed HSN Code 2306

The cattle feed HSN code is a code that falls within the Indian Tariff Chapter 23.04 which is “Residues and Waste from the Food Industries; Prepared Animal Fodder.” Parastatals and societies which fall under 2306 HSN code that deal with other residues and waste classes means this “Soy oil extract Residue” includes which does not include bound or pellet classes.

The 2306 HSN code has different subheadings for types of residues and by-products for use in animal feed. The understanding of code categorization under this law is very pertinent and fundamental to the manufacture, aggregation and distribution of cattle feed.

HSN Code	Description	Type
2306	Oilcake and other solid residues resulting from the extraction of fats	Residues from Vegetable Oil Cake
2306.1	Of Cotton Seeds	Specific to Cotton Seed Residues
2306.2	Of Linseed	Specific to Linseed
2306.3	Of Sunflower Seeds	Specific to Sunflower Seed Residues
2306.9	Other	General Animal Feed

GST on Cattle Feed

Cattle feed with 2306 HSN code classification under the GST norm is most of the time understood to be free of GST. It is so as feed for livestock subjects aimed at the particular cattle helping aid the country in the agricultural and livestock economy. This is supported by the Indian government through various notifications where there has been a circular indicating that certain goods including cattle feeds do not attract GST.

ITC’s Implications for Cattle Feed

Despite the exclusion of GST when purchasing cattle feed, businesses in this area may face issues with the Input Tax Credit (ITC). Since cattle feed has been treated as a zero-rated product, manufacturers, wholesalers and retailers are not allowed to ITC for inputs for the making and selling of cattle feeds. This can affect the overall cost structure for businesses, as taxes that are levied on raw materials, transport and other cost-related activities can never be recovered through ITC.

Exemptions and Special Cases

The exemption of GST regarding cattle feed also extends to other animal and farming-related products. Still, industries have to be very keen when evaluating and classifying their goods based on the HSN Code to prevent wrong classification and possible prosecution.

Compliance and Documentation Requirements

When manufacturing, selling or distributing cattle feed, a business should ensure this activity is by the GST Law, although the products may be considered as exempt items. Such includes registration under the GST law, filing of returns and keeping proper records about all transactions carried out by the organization.

GST Compliance for Cattle Feed Businesses

Regular tax filings are still expected to be lodged, GSTR-1, and GSTR-3B even though cattle feed is an exempt commodity from GST. So long as a company cannot meet these commitments there are penalties and legal measures that are expected to be applied on them.

Documentation

All components of compliance are properly supported by submitted documents. This will entail keeping invoices, ability to furnish purchase bills, and possessing transport and other documents relevant to the sale of cattle feed. It lies within the responsibility of such businesses to ensure that their invoices contain a clear statement on the HSN Code exemption of the products they sell.

Conclusion

The cattle feed HSN code 2306 along with GST provisions of cattle feed comes into bear as business interests that traverse the Agriculture and Livestock industries, that is, business enterprises need to appreciate. The Zero-rated GST status has its advantages for various farmers and livestock holders, however, businesses are required to still comply with the regulations and handle the Absence of the ITC.

From the correct pricing and recording of goods and provision of proper compliance records, such compliance will be observed concerning the benefits that are offered under the GST. The cattle feed industry in India is an emerging trend and to make the most of the rising horizontal opportunities available, assigning meaning to HSN code 2306 and its GST relevance will come in handy.

FAQs

1. What is the HSN for cattle feed in GST?

The HSN Code of cattle feed 2306 Harmless oil-cake and other solid residues of vegetable fats or oils, is categorized under “Residues and Waste from the Food Industries; Prepared Animal Fodder.”

2. Whether HSN code 2306 attracts GST on cattle feed?

No, 2306 HSN code relating to cattle feed is ordinarily exempt from GST according to Notification No. 2/2017-Central Tax (Rate).

3. What does the HSN code 2306 mean?

HSN Code 2306 means animal feeds including oil cake and other solid residues of oils and fats extraction processes.

4. Is there any GST on the HSN 2306 animal feed?

The animal feed HSN code attracts the nil rate of GST meaning that there is no tax liability on it.

5. How is animal feed HSN Code classified for categorization in the HSN industry?

Cattle feed falls under HSN Code 2306 ‘Other residues and waste from the manufacture of oils and fats -edible and non–edible, which are used in animal pours feeds such as oilcake of cotton, sunflower, linseed seeds.

6. Is it possible to avail of an Input Tax credit on the expenses incurred on the feed products classified under HSN code 2306?

No, businesses are not entitled to avail of Input Tax Credit (ITC) alongside cattle feed as the same is treated under the regime of zero-rated supplies.

7. Why is the code HSN 2306 important especially when it comes to the livestock sector?

Cattle feed against HSN code 2306 is very important to the livestock sector as it specifies the range of cattle feed and also helps in the maintenance of the GST compliance on the set exemptions which are in favour of farmers and livestock owners.

8. Is there no GST on certain animal feed, cattle feed for example, at any time?

Most of the animal feeds inclusive of cattle feed HSN code 2306 are exempt from GST. However, businesses must check the classification of specific products.

9. What is the HSN code assigned to cattle feed in GST?

The HSN code for cattle feed in GST is 2306 which is applicable for products which are used as animal fodder, especially the residues from various food technologies.

10. How does a business know that it has classified the cattle feed appropriately under HSN code 2306 the way one would wish to do it without challenges to avoid classification errors?

The businesses should employ legal and tax professionals or study the parameters of the GST to properly classify the cattle feed HSN code 2306 to help eliminate errors of misclassification.

Updated on:

September 4, 2024