2021 (8) TMI 189 - AAR - GST

Classification of goods - rate of GST - Applicable HSN Code - manufacture and sale of ready to prepare cook products like Dosai Mix, Idly Mix, Tiffen Mix, Sweet Mix, Health Mix, Porridge Mix in the name of KRISHNA - products fall under the headings CTH 1901 and CTH 2106 or under CTH 1106 and CTH 2302? HELD THAT - CTH 1901 covers 'Flour', not only of the cereal covered under Chapter 11 but also of vegetable origin of any chapter; the preparation may be in the form of powders, granules, doughs or other solid forms such as strips or discs or in liquid form but the cocoa content should be 'NIL' or less than 40% and should not have been specified or included elsewhere; these preparations are used by simply mixing with or boiling in water, or for making culinary preparations; the products covered under this heading may also constitute intermediate preparation for the food industry. CTH 2106 covers those food preparations for use either directly or after processing such as cooking for human consumption and such food preparations should not be covered by any other heading of the Tariff, The heading includes preparations consisting of chemicals (salts) with food stuffs (flour, sugar, milk powder, etc) for incorporation in food preparations either as ingredient or to improve some of the characteristics of the product. CTH 2302 covers by products of the milling industry which do not comply with the requirements of Chapter Note 11(2)(A) and sifting residues. CTH 1106 covers flours of dried leguminous vegetable and lentils if they are obtained only by milling of these raw materials through the process specified therein and no further processing has taken place and no addition of other substances with a view for their use as food preparations - In the case at hand, none of the products are entirely made of flours of products falling under Chapter 7 or 8 of the Tariff. CTH 1901 covers preparation in the form of powders, granules, etc of cereal covered under Chapter 11 of vegetable origin of any chapter, which are used by simply mixing with or boiling in water, or for making culinary preparations or may constitute intermediate preparation for the food industry and not elsewhere specified or included - In the case at hand the products are not usable by simply mixing with or boiling in water and require to be further processed/cooked for human consumption. The products in hand are more of in the nature of products meant for preparatory to cook food for human consumption and per-se not a preparation which can be used by mixing with water or boiling in water and therefore, the products do not merit classification under CTH 1901 - where the products wherein the major ingredients are mix of cereal flours and mix of gram flours respectively, which are preparations in the form of powder of cereal vegetable origin do not fall under this category of products as these products cannot be said to be used by simply mixing with or boiling in water but required further processing and be cooked. CTH 2302 covers products of milling industry which do not comply with the requirements of Note 2(A) to Chapter 11 - In the case at hand, the applicant has not furnished any test report and further has stated during hearing, no such tests were conducted and therefore, we do not agree to take the arguments without any evidentiary proof and hold none of the products merit classification under Chapter 23 and more specifically under CTH 2302 as claimed by the applicant. In this connection, it is pertinent to note that the State Jurisdiction Officer, who has the administrative control over the applicant has not favoured the classification under Chapter 23. The residual category to be examined is CTH 2106 under which the applicant classifies these products. CTH 2106 covers food preparations for use either directly or after processing such as cooking and the product must not be covered under any other heading, i.e., it is residuary heading for the products which is not specifically classified elsewhere in the Tariff and covers all the food preparations for use for human consumption - In the case at hand, all the products are a mix of various ingredients which do not find merit to be classified based on the major constituent of the product as all the ingredients are equally important for the product. Further, all the products are marketed and known in common parlance as the preparatory product for Dosai, Idli, Tiffin, Porridge, etc and is not identified based on the major ingredient (based on the percentage of constitution) alone, contained in the said product - It is pertinent to note that the applicant does sell individual 'Cereal flours'/Gram flours classifying under Chapter 11 as seen from the entries in the invoices furnished by them. Therefore, the products being 'food preparations' and not classifiable specifically under any of the Tariff headings based on the major constituents or other criteria handed by the rules of Interpretation. All the products for which classification is sought before us are classifiable under CTH 2106. Applicable rate of tax under GST - HELD THAT - In the case at hand, the products are all food preparations in the form of powder. The Dosai Mixes and Idli Mixes are packed and sold as mixes which is to be mixed with water/boiled water/curd to make it as batter and the product sold is a powder and not batter. Therefore the entry at 100A of Schedule-I is not applicable to the applicant's products. All the 49 products for which the ruling is sought is classifiable under CTH 2106 and the applicable rate is 9% CGST and 9%SGST as provided at SI.No. 23 of Schedule -III of the Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 as amended and entry S.No. 23 of Schedule-Ill of Notification No. II (2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended The classification of the products is CTH 2106 and the applicable rate of tax is 18% GST as per entry no. 23 of Schedule-Ill of Notification No. 11(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended and the same, item-wise (a). The following Dosai Mix goods under CTH 2106 taxable at 18% are Krishna Rava Dosai Mixes, Krishna Special Rava Dosai Mixes, Krishna Ragirava Dosai Mix 200gms, Sola Dosai Mix 500gms, Kambu Dosai Mix 500gms, Ragi Dosa Mix 500gm, Multigrain Dosai Mix 200gm, Horse Gram Dosai Mix 200gm and Green Leaf Dosai Mix 200gm. (b). The following Idli Mixes goods under CTH 2106 taxable at 18% are Kanchipuram Idly Mix 200gms, Oats Idly Mix 200gm, Masala Idly Mix 200gm, Wheat Rava Idly Mix (Box)200gm, Rava Idly Mix 200 / 500gm, Ragi and Bajra Idly Mix 500gm and Rice Idly Mix 500 gm. (c). The following Tiffin Mixes goods under CTH 2106 taxable at 18% are Adai Mavoo Mix 200gm and 500gm, Millet Adai Mix 200gm, Kitchadi Mix 200gm and 500gm, Parota Mix 200gm and 500gm, Venpongal Mix 200gm, Uzhunthakali Mavoo 200gm, Kesari Mix 200gm, Pavasam Mix 200gm and 500gm, Vadai Mavoo 200gm, Masai Vadai Mavoo 200gm, Pattanam Pakoda Mix 200gm, Ready Idiyappam, Baiii Mix 200gm and 500gm, Wheat Khara Bath Mix 200gm, Rice Upma Mix 200gm and Fenugreek Kaxhi Mix 200gm. (d). The following Tiffin Mixes goods under CTH 2106 taxable at 18% are Health Mavoo Mix 200gms, 500gm, Sprouted Roased Health Mix 200gm and 300gm, Sprouted Roased Health Mix (Badam) box 200gm and Sprouted Roased Health Mix (Chaco) box 200gm. (e). The following Porridge Mixes goods under CTH 2106 taxable at 18% are Baira Porridge Mix 500gm, Jowar Porridge Mix 500gm, Ragi Porridge Mix 500gm, Horse Gram Porridge Mix 200gm, Greengram Porridge Mix 200gm, Multigrain Porridge Mix 200gm, Little Rice Foxtail Rice Porridge Mix 100gm, Red Rice Baira Porridge Mix 100gm, Red Hand Grinded Rice Porridge Mix 100gm, Yellow Corn Rice Porridge Mix 100gm, Kodu Rice Sorghum Porridge Mix 100gm, Rice Dhall Porridge Mix 100gm and Samba Wheat Barnyard Rice Porridge Mix 100gm.

Summary

Issues Involved:
1. Clarification on the rate of GST for the products listed in the application.
2. Determination of the applicable HSN code for the products.

Detailed Analysis:

Issue 1: Clarification on the rate of GST for the products listed in the application

The applicant, engaged in the manufacture and sale of ready-to-prepare cook products such as Dosai Mix, Idly Mix, Tiffin Mix, Sweet Mix, Health Mix, and Porridge Mix, sought clarification on the applicable GST rates for these products. The products are sold in various packaging sizes, including 175g, 200g, 500g, and 1kg.

The applicant provided detailed compositions of each product, indicating that the ingredients fall under various GST rate slabs: 0%, 5%, 12%, and 18%. They argued that their products should be classified similarly to those in a Gujarat AAR ruling, which classified similar mixes under subheading 11061000 with a 5% GST rate. However, the applicant was currently classifying their products under CTH 1901 or CTH 2106 and charging 18% GST.

Upon examination, the authority found that the products are not merely flour mixes but are food preparations requiring further processing before consumption. Therefore, they do not qualify under CTH 1106 or CTH 2302 as claimed by the applicant. Instead, the products were classified under CTH 2106, which covers food preparations not elsewhere specified or included.

The applicable GST rate for products under CTH 2106 is 18% (9% CGST + 9% SGST), as per entry no. 23 of Schedule-III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, as amended by Notification No.41/2017-Central Tax (Rate) dated 14.11.2017.

Issue 2: Determination of the applicable HSN code for the products

The products in question include various mixes for Dosai, Idly, Tiffin, Health, and Porridge. The authority classified all these products under CTH 2106 based on their nature as food preparations requiring further processing. The detailed compositions provided by the applicant showed that these products are mixtures of cereal flours, gram flours, salt, and other additives, which are not directly consumable and require further cooking.

The authority examined the relevant headings and explanatory notes for CTH 1106, CTH 1901, CTH 2106, and CTH 2302. It concluded that the products did not meet the criteria for classification under CTH 1106 or CTH 2302. Instead, they fell under the residual category of CTH 2106, which includes food preparations not specified elsewhere.

Conclusion:

Ruling:
The classification of the products is under CTH 2106, and the applicable rate of tax is 18% (9% CGST + 9% SGST) as per entry no.23 of Schedule-III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, as amended. The detailed product-wise classification and applicable tax rates are as follows:

| S/No. | Name of the Commodity | HSN | Tax |
|-------|------------------------|------|------|
| 1 | Krishna Rava Dosai Mixes | 2106 | 18% |
| 2 | Krishna Special Rava Dosai Mixes | 2106 | 18% |
| 3 | Krishna Ragirava Dosai Mix 200gms | 2106 | 18% |
| 4 | Sola Dosai Mix 500gms | 2106 | 18% |
| 5 | Kambu Dosai Mix 500gms | 2106 | 18% |
| 6 | Ragi Dosa Mix 500gm | 2106 | 18% |
| 7 | Multigrain Dosai Mix 200gm | 2106 | 18% |
| 8 | Horse Gram Dosai Mix 200gm | 2106 | 18% |
| 9 | Green Leaf Dosai Mix 200gm | 2106 | 18% |
| 10 | Kanchipuram Idly Mix 200gms | 2106 | 18% |
| 11 | Oats Idly Mix 200gm | 2106 | 18% |
| 12 | Masala Idly Mix 200gm | 2106 | 18% |
| 13 | Wheat Rava Idly Mix (Box)200gm | 2106 | 18% |
| 14 | Rava Idly Mix 200 / 500gm | 2106 | 18% |
| 15 | Ragi and Bajra Idly Mix 500gm | 2106 | 18% |
| 16 | Rice Idly Mix 500 gm | 2106 | 18% |
| 17 | Adai Mavoo Mix 200gm and 500gm | 2106 | 18% |
| 18 | Millet Adai Mix 200gm | 2106 | 18% |
| 19 | Kitchadi Mix 200gm and 500gm | 2106 | 18% |
| 20 | Parota Mix 200gm and 500gm | 2106 | 18% |
| 21 | Venpongal Mix 200gm | 2106 | 18% |
| 22 | Uzhunthakali Mavoo 200gm | 2106 | 18% |
| 23 | Kesari Mix 200gm | 2106 | 18% |
| 24 | Pavasam Mix 200gm and 500gm | 2106 | 18% |
| 25 | Vadai Mavoo 200gm | 2106 | 18% |
| 26 | Masai Vadai Mavoo 200gm | 2106 | 18% |
| 27 | Pattanam Pakoda Mix 200gm | 2106 | 18% |
| 28 | Ready Idiyappam | 2106 | 18% |
| 29 | Baiii Mix 200gm and 500gm | 2106 | 18% |
| 30 | Wheat Khara Bath Mix 200gm | 2106 | 18% |
| 31 | Rice Upma Mix 200gm | 2106 | 18% |
| 32 | Fenugreek Kaxhi Mix 200gm | 2106 | 18% |
| 33 | Health Mavoo Mix 200gms,500gm | 2106 | 18% |
| 34 | Sprouted Roased Health Mix 200gm and 300gm | 2106 | 18% |
| 35 | Sprouted Roased Health Mix (Badam) box 200gm | 2106 | 18% |
| 36 | Sprouted Roased Health Mix (Chaco) box 200gm | 2106 | 18% |
| 37 | Baira Porridge Mix 500gm | 2106 | 18% |
| 38 | Jowar Porridge Mix 500gm | 2106 | 18% |
| 39 | Ragi Porridge Mix 500gm | 2106 | 18% |
| 40 | Horse Gram Porridge Mix 200gm | 2106 | 18% |
| 41 | Greengram Porridge Mix 200gm | 2106 | 18% |
| 42 | Multigrain Porridge Mix 200gm | 2106 | 18% |
| 43 | Little Rice & Foxtail Rice Porridge Mix 100gm | 2106 | 18% |
| 44 | Red Rice & Baira Porridge Mix 100gm | 2106 | 18% |
| 45 | Red & Hand Grinded Rice Porridge Mix 100gm | 2106 | 18% |
| 46 | Yellow Corn & Rice Porridge Mix 100gm | 2106 | 18% |
| 47 | Kodu Rice & Sorghum Porridge Mix 100gm | 2106 | 18% |
| 48 | Rice & Dhall Porridge Mix 100gm | 2106 | 18% |
| 49 | Samba Wheat & Barnyard Rice Porridge Mix 100gm | 2106 | 18% |