9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 121 - AAR - GSTClassification of goods - rate of tax - Exemption from GST - Flavoured Milk for Tea Preparation - pasteurized milk - whether flavoured milk for Tea preparation can be considered a beverage containing milk? - HELD THAT - In common parlance, a beverage is (chiefly in commercial use) a drink other than water, It is a liquid for drinking especially such liquid other than water (as tea, milk, fruit juice beer) usually prepared (as by flavouring, heating, admixing) before being consumed. The Instant Product, flavoured milk for Tea Preparation can't be consumed instantly and it does not contains any additives like sugar or sweeteners for direct consumption. It is moreover, a 'preparation' made as per the description given by the applicant in the flow chart submitted by them. The applicant's product was found to be Tea Milk rather than 'Flavoured Milk for Tea Preparation' from which Tea shall be prepared. The final product Tea can be said to be a beverage but not the raw material i.e. Tea Milk . The product of the applicant is appropriately classifiable under Chapter 04 under heading 0401 20 00. Rate of GST - HELD THAT - Since, the product of the applicant, classifiable under Chapter Sub-Heading No. 0401 20 00, is pasteurized milk which is neither concentrated nor contains added sugar or other sweetening material and it is not Ultra High Temperature Milk, as declared by the applicant, it is eligible for the benefits under Notification No. 2/2017-Central Tax (Rate) dated 28-06-2017.
Issues Involved:
1. Classification of Flavoured Milk for Tea Preparation. 2. Rate of GST applicable on the said product. Issue-wise Detailed Analysis: 1. Classification of Flavoured Milk for Tea Preparation: The applicant, engaged in processing milk and milk products under the brand name "OSAM," sought an advance ruling on the classification of "Flavoured Milk for Tea Preparation." The product, "Osam Samridhi," consists of 99.85% milk, 0.1% stabilizer, and 0.05% ginger flavor, with no added sugar or sweeteners. It is sold in 1-liter polypacks with a shelf life of one day. The applicant argued that the product retains the essential characteristics of milk despite the addition of stabilizers and flavors, and thus should be classified under Chapter 4, Tariff item 0401:20:00. The applicant cited judicial pronouncements, including the Hon'ble Allahabad High Court's ruling in Gujrat Co-op Milk Marketing Federation Ltd. Vs State of U.P. 2017 (5) GSTL 351 (All), which held that flavored milk remains milk and does not transform into another product by the addition of permitted flavors. Similarly, the Hon'ble Supreme Court in Commissioner of Central Excise Vs Amrit Foods 2015 (324) ELT 418 (SC) held that the addition of stabilizers does not change the basic character of the product. The Advance Ruling Authority examined whether "flavoured milk for Tea preparation" could be considered a beverage containing milk. It concluded that the product is not a ready-to-consume beverage but a preparation intended for tea making. Therefore, the product retains its classification as milk under Chapter 04, heading 0401 20 00, rather than being classified as a beverage under Chapter 22. 2. Rate of GST applicable on the said product: The applicable GST rate was determined based on Notification 2/2017-Central Tax (Rate) dated 28-06-2017. According to serial number 25 of this notification, fresh milk and pasteurized milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk, are exempt from GST. Since the applicant's product is pasteurized milk without added sugar or sweeteners and is not UHT milk, it qualifies for the GST exemption under the specified notification. Order: Question: What would be the classification of 'Flavoured Milk for Tea Preparation'? Answer: The product 'Flavoured Milk for Tea Preparation' is classified under Chapter 04, heading 0401 20 00. Question: What would be the rate of GST applicable on the said product? Answer: The product is exempt from GST as per serial number 25 of Notification No. 2/2017-Central Tax (Rate) dated 28-06-2017. This ruling is valid subject to the provisions under Section 103(2) until declared void under Section 104(1) of the GST Act.
|
