2019 (4) TMI 1860 - AAR - GST

Classification of goods - rate of GST - parched / puffed gram (Hurigadale / Putani) - Circular No. 113/32/2019- GST dated 11.10.2019 - HELD THAT - The clarificatory circular states very clearly that leguminous vegetables which are subjected to mere heat treatment for removing moisture, or for softening and puffing or removing the skin, and not subjecting to any other processing or addition of any other ingredients such as salt and oil, would be classified under HS code 0713. It is pertinent to note that as per the contention of the applicant that only heat is used to remove moisture and for softening and puffing and for removing the skin and the same is found acceptable. It is also seen that no oil or salt is used in the process and is only dry heat. Hence as per the Clarification issued in the above Circular, the commodity in question Puffed Gram commonly called Fried Gram or Hurigadale or Putani in Kannada would be covered under HSN Code 0713. The goods in question are covered under serial no. 45 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017, if the same are not branded and packed in unit containers. If the same goods are branded and packed in unit containers, they get covered under serial no. 25 of Notification No. 1/2017- Central Tax (Rate) dated 28.06.2017 and is liable to tax at 2.5% under the CGST Act - Similarly, the goods are exempt or liable to tax at 2.5% under the Karnataka Goods and Services Tax Act, 2017.

Summary

Issues:
- Applicable rate of tax (GST) on parched/puffed gram (Hurigadale/Putani)

Analysis:
1. Issue: Applicable Rate of Tax
- The applicant sought an advance ruling on the applicable GST rate for parched/puffed gram (Hurigadale/Putani).
- The applicant clarified that the process involves mild heat treatment without the addition of salt or oil.
- Circulars issued by the Central Board of Indirect Taxes and the Commissioner of Commercial Taxes were referenced to determine the classification under HS Code 0713.
- The applicant highlighted confusion within the business community regarding the exemption status of the product.

2. Findings & Discussion:
- The Authority examined the process of manufacturing "Fried Gram" or "Hurigadale/Putani" and confirmed that it involves only dry heat treatment without the use of salt or oil.
- Referring to Circular No. 113/32/2019-GST, it was established that leguminous vegetables subjected to mild heat treatment without additional ingredients fall under HS Code 0713.
- The product in question, "Puffed Gram," commonly known as "Fried Gram" or "Hurigadale/Putani," aligns with the classification criteria specified in the Circular.
- The Circular further stipulates that branded and packaged products attract a 5% GST rate, while unbranded goods are exempted from GST.

3. Ruling:
- The Advance Ruling Authority ruled that unbranded parched/puffed gram is exempt from tax under the CGST Act and Karnataka GST Act.
- However, if the product is branded and packaged in unit containers, it is liable to a 2.5% tax under both the CGST Act and the Karnataka GST Act.

This detailed analysis of the legal judgment addresses the issue of the applicable rate of tax on parched/puffed gram, providing a comprehensive overview of the applicant's contentions, relevant circulars, findings, and the final ruling by the Authority for Advance Ruling, Karnataka.