The Goods and Services Tax Appellate Tribunal (GSTAT), Hyderabad Bench has admitted an appeal concerning the classification and applicable GST rate on Brewers’ Spent Grain (BSG) and its subsequent clearance as cattle feed.
The Bench of Sushil Kumar Sharma (Judicial Member) and Duvvuri Krishna Srinivas (Technical Member) directed the Department to file its counter to the appeal filed by the respondents within four weeks. The appellants were also directed to properly amend the cause title of the proceedings.
The principal issue before the Tribunal relates to the appropriate tariff classification of Brewers’ Spent Grain, commonly referred to as BSG. According to the order, the Department sought to classify the product under Chapter Heading 2303, whereas the assessee had claimed classification under Chapter Heading 2309.
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The classification assumes significance because the applicable GST treatment depends upon the tariff heading under which the product falls. The respondents had subsequently cleared the product as cattle feed, while claiming exemption under Notification No. 1/2017-CT(R). The Department, however, disputed the classification adopted by the assessee and proceeded on the basis that BSG was classifiable under Chapter Heading 2303.
The dispute had initially been considered by the Adjudicating Authority, which confirmed the duty demand after accepting the Department’s proposed classification under Chapter Heading 2303. The authority also imposed a penalty under Section 74.
Aggrieved by the adjudication order, both the appellant and the respondents approached the First Appellate Authority. The First Appellate Authority ultimately upheld the classification determined by the Adjudicating Authority and confirmed the duty demand.
However, there was a modification concerning the penalty provision. While the Adjudicating Authority had imposed the penalty under Section 74, the First Appellate Authority altered the applicable penal provision to Section 73 and imposed penalty accordingly.
The proceedings before GSTAT have become procedurally significant because the Department informed the Bench that it had filed four appeals, numbered 207, 208, 209 and 235 of 2026, against the impugned order. The Department explained that the relevant appellate order, identified as APL 04, had been issued separately on a four-year-wise basis, resulting in multiple appeals.
The respondents also informed the Tribunal that they had filed an appeal against the impugned order. Further, the respondents had already filed cross-objections in all four appeals filed by the Department.
After hearing the submissions, the GSTAT Bench was of the considered view that the appeal should be admitted and that all five appeals should be considered together. Accordingly, the Registry was directed to tag all five appeals and list them on the same day.
The Tribunal’s direction is aimed at ensuring that the connected proceedings concerning the same underlying classification and GST dispute are considered together rather than being dealt with independently.
The matter has been directed to be listed after six weeks. The Tribunal’s August 5 order is therefore primarily procedural at this stage and does not finally determine the correct classification of Brewers’ Spent Grain or the ultimate GST liability.
Importantly, the order presently records the competing positions of the Department and the assessee concerning classification under Chapter Heading 2303 versus Chapter Heading 2309, but the Tribunal has not, in this order, finally adjudicated which classification is legally correct. The question of whether the product qualifies for the claimed GST treatment as cattle feed, including the exemption claimed under Notification No. 1/2017-CT(R), remains to be examined in the substantive proceedings.
The GSTAT Hyderabad Bench has admitted the connected appeals and directed their joint listing, while requiring the Department to respond to the respondents’ appeal. The substantive classification dispute—whether Brewers’ Spent Grain is appropriately classifiable under Chapter 2303 or Chapter 2309, and the consequent GST/exemption implications—will be considered when the connected appeals are heard on merits.
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