2024 (6) TMI 108 - AAAR - GST

Classification of goods - different varieties of Flours i.e. Gota Flour, Khaman Flour, Dalwada Flour, Dahiwada Flour, Dhokla Flour, Idli Flour and Dosa Flour manufactured and supplied by applicant - rate of GST - HELD THAT - As is evident from the explanatory notes, it covers food preparations not elsewhere specified or included. Further of 21.06 covers the preparation for use, cither directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.) for human consumption, and preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption, are classifiable under Chapter Heading 21.06 of the CTA, 1975. The appellant has already stated that his 7 products of Mix flour / Instant Mix flour are preparations consisting wholly of foodstuffs viz. flours of leguminous vegetables and cereals as well as spices and condiments, and these products are used in the making of food preparations ((i) Gota flour (ii) Khaman flour (iii) dalvada flour (iv) Dahiwada flour (v) Dhokla flour (vi) Idli flour (vii) Dosa flour), for human consumption. Further, these products are preparations for use, either directly or after processing, such as cooking, dissolving or boiling in water, milk, etc., for human consumption - all the aforementioned 7 products of Mix flour / Instant Mix flour are appropriately classifiable under 21.06 of the HSN. As these products are not specifically mentioned under any specific Tariff Item of Chapter Heading 2106 of the CTA, 1975, these products are classifiable under the residuary entry i.e. Tariff Item 2106 90 99 as Other . Mix Flour / Instant Mix Flour - HELD THAT - Any product which is a food preparation and which is not elsewhere specified or included in the CTA. 1975, gets covered under Chapter Heading 2106 of the CTA, 1975. Therefore, merely because the end consumer of the Instant Mix Flour is required to follow certain food preparation processes before such product(s) can be consumed, is no ground to take these products out of Chapter Heading 2106 of the CTA, 1975.

Summary

Issues Involved:
1. Classification of products (Gota flour, Khaman flour, Dalwada flour, Dahiwada flour, Dhokla flour, Idli flour, and Dosa flour).
2. Applicable rate of GST on these products.

Summary:

Issue 1: Classification of Products
The appellant, M/s. Kitchen Express Overseas Ltd, contended that their products, which include Gota flour, Khaman flour, Dalwada flour, Dahiwada flour, Dhokla flour, Idli flour, and Dosa flour, should be classified under HSN code 1106, attracting 5% GST (2.5% CGST + 2.5% SGST). They argued that these products are flours with added spices and not ready-to-eat products, thus falling under Chapter 11 of the Customs Tariff Act, 1975. However, GAAR classified these products under HSN 2106 90 (Others), attracting 18% GST (9% CGST + 9% SGST), as per SI. No. 23 of Schedule-III to Notification No. 01/2017-Central Tax (Rate) dated 28-6-2017.

Issue 2: Applicable Rate of GST
The appellant argued that their products should attract a lower GST rate of 5% as they are similar to "Sattu" or "Chhatua," which are classified under HSN code 1106. However, GAAR observed that the products contain spices and other ingredients in varying proportions (5% to 27%), which are not mentioned in Chapter Heading 1106 or the relevant explanatory notes of HSN. Therefore, the products are not covered under Chapter Heading 1106 but fall under HSN 2106 as "Food preparations not elsewhere specified or included," attracting 18% GST.

Findings and Ruling:
The Gujarat Appellate Authority for Advance Ruling (GAAAR) upheld GAAR's classification of the products under HSN 2106 90 99, attracting 18% GST. The authority noted that the products are preparations for use, either directly or after processing, for human consumption and are appropriately classifiable under Chapter Heading 21.06 of the Customs Tariff Act, 1975. The appeal was rejected, and the ruling of GAAR was confirmed.

Conclusion:
The appeal filed by M/s. Kitchen Express Overseas Ltd against Advance Ruling No. Guj/GAAR/R/32/2021 dated 30.7.2021 was rejected, and the products were classified under HSN 2106 90 99, attracting 18% GST.