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2024 (11) TMI 327 - AAR - GSTClassification of packed halwa purchased from an outsourced manufacturer and marketed under the applicant s brand name - whether the same are classifiable as Namkeens etc.. and are covered by HSN Code 2106 90 and taxable under Entry 46 of Schedule II of Notification No. 1/2017 Central Tax (Rate), dated 28-06-2017? - HELD THAT - Entry No 101 in Schedule I of Notification No 1/2017 Central Tax (Rate), dated 28-06-2017, specifically covers sweetmeats under HSN 2106 90 against 2.5% CGST. The same classification applies when halwa is purchased from a supplier and packed at the applicant's facility and marketed under applicant's brand name. The HSN code 2106 90 falling under Schedule II covers items such as Namkeens. When sweetmeat is specifically named and covered under Schedule I of Notification No 1/2017 Central Tax (Rate) dated 28-06-2017, we find no reason to classify it under Schedule II irrespective of the fact that the same HSN, viz., 2106 90 appears in both the schedules.
Issues: Classification of Halwa under GST
Issue 1: Classification of packed halwa purchased from an outsourced manufacturer and marketed under the applicant's brand name In this case, the applicant sought an advance ruling on whether packed halwa purchased from an outsourced manufacturer and sold under their brand name should be classified as "Namkeens etc." and be taxable under Entry 46 of Schedule II of Notification No. 1/2017 Central Tax (Rate). The applicant argued that halwa should be classified under Heading 2106 90 99 and taxed at 5% under Entry No. 101 of Schedule I of the notification. However, the Authority for Advance Ruling determined that sweetmeats, including halwa, are specifically covered under Entry No. 101 of Schedule I, and thus, the classification under Schedule II as "Namkeens" was not applicable. Therefore, the ruling concluded that packed halwa purchased from an outsourced manufacturer and marketed under the applicant's brand name is not classifiable as "Namkeens" and falls under HSN Code 2106 90 but is not taxable under Entry 46 of Schedule II. Issue 2: Classification of halwa purchased from a supplier, packed at the applicant's facility, and marketed under the applicant's brand name The second issue involved in this ruling was the classification of halwa purchased from a supplier, packed at the applicant's facility, and sold under the applicant's brand name. The applicant questioned whether this halwa should also be classified as "Namkeens etc." and be taxable under Entry 46 of Schedule II. The Authority for Advance Ruling reiterated that sweetmeats, including halwa, are specifically covered under Entry No. 101 of Schedule I of the notification, regardless of whether the halwa is sourced from an outsourced manufacturer or packed at the applicant's facility. Therefore, the ruling stated that halwa purchased from a supplier, packed at the applicant's facility, and marketed under the applicant's brand name is not classifiable as "Namkeens" but falls under HSN Code 2106 90 and is not taxable under Entry 46 of Schedule II. In conclusion, the Authority for Advance Ruling clarified the classification of halwa under the GST regime, emphasizing the specific entries in the notifications and the applicable tax rates based on the nature of the product and its source.
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