2021 (12) TMI 723 - AAR - GST

Classification of goods - Rava Idli Mix - classified under chapter 21 with HSN 2106 9090 or not - HELD THAT - The Tariff headings from 1101 to 1104 covers products of milling of specific cereals listed in Column(1) of the table, with a defined starch and ash content, and having a particular size/texture. In the instant case it is an admitted fact that the impugned product is manufactured by mixing the flours of certain cereals and pulses, the details of which have not been disclosed by the applicant, and hence it is a mixture and neither tallies with the content at column (1) of the above table nor meet the specific requirement of starch and ash content. Thus the compliance requirement is not fulfilled and hence the impugned product does not merit the classification under tariff headings from 1101 to 1104. Also the Tariff heading 1105 covers FLOUR, MEAL, POWDER, FLAKES, GRANULES AND PELLETS OF POTATOES, which is not the case with the impugned product. It is clear that Tariff heading 1106 covers flour, meal and powder of individual raw materials of either leguminous vegetables(of heading 0713) or roots or tubers(of heading 0714) or of products of Chapter 8. Like other tariff headings in the Chapter, tariff heading 1106 also covers products of individual raw material and not mixtures. Rava Idli mix is admittedly a mixture of flour of pulses, cereals and other ingredients resulting in a different product. Thus the impugned product does not get covered under this tariff heading i.e. 1106. In the instant case the impugned product is admittedly a mixture and does not give the character of either of the constituent flour but altogether a different new product with the different character as Rava Idli Mix . Therefore the impugned product is rightly classifiable under Rule 3(a) supra and hence Rule 3(b) is not applicable. Further as the impugned product is covered under rule 3(a), there is no need to look into rule 3(c) - the impugned product Rava Idli Mix merits classification under tariff heading 2106 and attract the GST rate of 18%, in terms of entry number 23 of schedule-III to the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 which covers all kinds of food mixes including instant food mixes.

Summary

Issues Involved:

1. Classification of the product "Rava Idli Mix" under the appropriate Harmonized System of Nomenclature (HSN) code.
2. Determination of the applicable GST rate for the product.

Detailed Analysis:

Issue 1: Classification of the product "Rava Idli Mix"

The applicant, a manufacturer of various food products including "Rava Idli Mix," initially classified the product under tariff heading 2106 9090, discharging 18% GST. However, they later contended that the product should be classified under tariff heading 1106 1010. The applicant's argument was based on the process of manufacturing the product, which involves mixing flours of cereals/grains and pulses with spices and condiments without any cooking process.

Applicant's Interpretation:

- The applicant argued that Chapter 11 covers products of the milling industry, including flour, meal, and powder of dried leguminous vegetables (heading 0713), sago, roots or tubers (heading 0714), and other products of Chapter 8.
- They contended that "Rava Idli Mix," being a mixture of flours, should fall under heading 1106, which includes flour, meal, and powder of dried leguminous vegetables.
- The applicant cited various rules for the interpretation of the Customs Tariff Act, 1975, and previous rulings to support their claim that the product should be classified under heading 1106.

Authority's Findings:

- The authority examined the classification of the product under both headings 1106 and 2106.
- Chapter 11 covers products of the milling industry with specific starch and ash content requirements. The product "Rava Idli Mix" is a mixture of flours and does not meet these specific requirements.
- Tariff heading 1106 covers flour, meal, and powder of individual raw materials, not mixtures. "Rava Idli Mix" is a mixture and thus does not get covered under heading 1106.
- The authority also referred to Circular No. 80/54/2018-GST, which clarifies that mixtures of flour of ground pulses and cereals fall under HSN code 1106 only if they contain very small amounts of additives. The "Rava Idli Mix" contains a mixture of flours and other ingredients, resulting in a different product.

Issue 2: Determination of the applicable GST rate

- Chapter 21 covers miscellaneous edible products, and tariff heading 2106 includes food preparations not specified elsewhere.
- The authority concluded that "Rava Idli Mix" merits classification under tariff heading 2106 as it is an edible product and food preparation not specified elsewhere.
- Rule 3(a) of the general rules for the interpretation of customs tariff specifies that when goods are classifiable under two or more headings, the heading which provides the most specific description shall be preferred. Therefore, tariff heading 2106 is more specific for "Rava Idli Mix."

Ruling:

The product "Rava Idli Mix" merits classification under tariff heading 2106 and attracts 18% GST in terms of entry number 23 of Schedule-III to the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.