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2022 (7) TMI 1101 - AAR - GSTClassification of goods - Anna Malai Mithai - the mithai is containing the ingredients Sugar, Vegetable Fat, Skimmed Milk Powder, Whey Powder, Emulsifier and other permitted Flavor s, which is identical to the commonly known Indian sweet Rabdi - to be classified under the Tariff Heading 2106 as Sweet Meats or under Tariff Heading 0404 as other dairy product consisting of natural milk constituents? HELD THAT - Chapter 04 essentially covers dairy products and as per Chapter Note 4 of Chapter 04, the heading 0404 applies interalia to products consisting of natural milk constituents whether or not containing added sugar or other sweetening matter or flavoured or containing added fruit or cocoa. Now while chapter head 0401 to 0406 are meant for natural dairy products viz. Milk, Cheese, Butter Milk, Butter, Whey etc. and other products made out of such items, the product in question i.e. Anna Malai Mithai contains Skimmed Milk Powder, Whey Powder, Sugar, Emulsifiers etc. as predominant ingredients, which would not make it appropriate to be classified as a product of natural milk constituents as has been pleaded by the Applicant. By no stretch of imagination, the product in question can be brought under the ambit of Chapter 04 of the HSN. Thus, we definitively rule out the classification of the impugned product under Chapter 04 of the HSN. Classification of the product under Chapter 1704 - HELD THAT - The Chapter 17 of the HSN is for Sugar Sugar Confectionery . While 1701 to 1703 headings relate to Sugars in different forms, the Heading 1704 mentions Sugar Confectionery. Sugar Confectionery has nowhere been specifically defined under the GST law or under HSN - the product Anna Malai Mithai cannot be terms as Chewing Gum (1704 10 00) or Jelly Confectionery (1704 90 10) or Boiled Sweet (1704 90 20) or Toffee, caramel etc (1704 90 30). Clearly the product is neither a gum nor boiled sweet nor toffee or caramel. That leaves residual entry Others (1704 90 90) if at all the impugned product is to be brought under the purview of Chapter 17. There is no specific entry under Chapter 17 which would encompass the impugned product even by a remote chance. Moreover, the residual entry i.e., Others (1704 90 90) is to take care of other similar products of the same family viz. Sugar Confectionery which do not find specific mention against rest of the subheadings. The impugned product i.e., Anna Malai Mithai is made of Skimmed Milk Powder, Sugar, Whey Powder, Emulsifiers flavours etc. mixed together in a semi-liquid form and packed in elongated pouches/sachets and ready for consumption. The ingredients, process and final shape of the impugned product takes itself out of family of Sugar Confectionery. Impugned product vis-a-vis heading 2106 - HELD THAT - Chapter 21 essentially covers Miscellaneous Edible Products . Obviously, the term Miscellaneous indicates that this particular chapter would contain all such edible products which are not specifically covered elsewhere under the Tariff. The Chapter Headings further describes various edible preparations such as extracts of Coffee, tea, Yeast, Soups, broths, Sauces etc under Heading 2101 to 2105. Further as is the convention, heading 2106 has been given to include all those items which are not elsewhere specified. Furthermore, 2106 further sub-divides various edible items like Protein Concentrates, Pan Masala, Sharbats, Supari, Custard Powder etc. under Sub-headings 21061000 to 21069080 and to conclude there is a residual entry as Others under 2106 90 99. The product in question i.e., Anna Malai Mithai is a product made out of Skimmed Milk Powder, Sugar Whey Powder as main ingredients with Emulsifiers etc. put up in small sachet/pouch in semi-liquid (paste) consistency, ready for consumption. The product cannot be termed as Dairy Product or Sugar Confectionery - the impugned product viz. Anna Malai Mithai would merit classification as Miscellaneous Edible Product under Chapter Heading 2106 90 99, as Sweetmeat and chargeable to GST as applicable.
Issues Involved:
1. Classification of the product "Anna Malai Mithai" under GST Tariff. 2. Determination of the appropriate Tariff Heading for "Anna Malai Mithai" – whether it falls under Tariff Heading 2106 as Sweet Meats or under Tariff Heading 0404 as other dairy products. Issue-wise Detailed Analysis: 1. Classification of the product "Anna Malai Mithai" under GST Tariff: The applicant, engaged in the manufacture and supply of confectionery and dairy/sweet products, sought an advance ruling on the classification of their product "Anna Malai Mithai." The product, marketed in small sachets, contains ingredients such as sugar, vegetable fats, skimmed milk powder, whey powder, emulsifiers, and flavors. The applicant argued that the product should be classified under Tariff Heading 2106 as Sweet Meats. 2. Determination of the appropriate Tariff Heading for "Anna Malai Mithai": - Applicant's Arguments: - The applicant contended that "Anna Malai Mithai" should be classified as a sweet meat under Tariff Heading 2106 90 99. They supported their claim by referring to various definitions and case laws, including the dictionary definition of sweetmeat and the ruling in Hindustan Lever Ltd. v. CCE, Mumbai, which stated that sweet meats include products rich in sugar and do not need to be sold at traditional 'halwai' shops. - They also cited the CBEC FAQ on classification dated 29-9-2017, which clarified that products like halwa, barfi, and laddus fall under HS Code 2106 and attract 5% GST. - The applicant provided a laboratory test report and photographs of the product to support their claim that "Anna Malai Mithai" is a sweet meat. - Authority's Examination: - The authority examined the submissions, supporting case laws, and documents provided by the applicant. They noted that the issue raised falls under Section 97(2)(a) of the CGST Act 2017, related to the classification of goods. - The authority considered the applicant's alternate classifications of the product as a dairy product under Chapter 04 and as a sweet meat under Chapter 21. They ruled out classification under Chapter 04, as the product contains ingredients like skimmed milk powder, whey powder, and sugar, which do not make it a product of natural milk constituents. - The authority then examined the classification under Chapter 17 for sugar confectionery but found that "Anna Malai Mithai" does not fit under any specific entries like chewing gum, jelly confectionery, boiled sweets, or toffees. The product's ingredients and semi-liquid form take it out of the family of sugar confectionery. - The authority referred to the Food Safety and Standards Regulations, 2011, which classify traditional Indian sweets separately from confectionery. They concluded that traditional Indian sweets, including milk-based sweets, should not be classified under sugar confectionery. - Final Ruling: - The authority concluded that "Anna Malai Mithai" should be classified under Chapter Heading 2106 90 99 as 'Sweetmeats' and chargeable to GST as applicable. - The ruling is valid prospectively and does not entitle the applicant to claim a refund of any tax paid prior to this ruling. RULING: Under Section 98 of the Central Goods and Services Tax Act, 2017, and the Madhya Pradesh Goods and Services Tax Act, 2017, the authority ruled that "Anna Malai Mithai" will merit classification under Chapter Heading 2106 90 of the GST Tariff as 'Sweetmeat.' The ruling is valid subject to the provisions under section 103(2) until declared void under section 104(1) of the GST Act.
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