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TMI Blog2020 (1) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... he normal rice has undergone specific mechanical and chemical processing resulting in to FRK. This preparation/ process of FRK is way beyond the scope mandated under Chapter 10 of GST Tariff (i.e. husked, milled, polished, glazed, parboiled or broken). Therefore, though FRK is shaped in form of rice by the mechanized process but it is not rice grain in terms of Chapter 10. Thus, FRK is classifiable under HSN 19049000 of GST Tariff as other and attracts GST @ 18%. - RAJ/AAR/2019-20/27 - - - Dated:- 28-11-2019 - J.P. MEENA AND HEMANT JAIN MEMBER Present for the applicant: Shri Sumit Bhargava (Authorised Representatives) Note : Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order. At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minimal behavior change is required as compared to supplementation. Considering these benefits, staple food fortification presents an opportunity to address micronutrient malnutrition at a mass scale. Rice Fortification - In India, rice fortification has the highest potential in staple food fortification programs as it is the staple food of 65 percent of the population and reaches the most vulnerable sections. Rice has the highest uptake in the government safety net programs such as, Integrated Child Development Services (ICDS), Public Distribution System (PDS), and the Mid Day Meal (MDM) program with a potential reach of 800 million vulnerable people in India, especially women and children. Department of Food Public Distribution (DFPD) is primarily concerned with promoting food security at the household level; however, with the launch of the Poshan Abhiyaan, DoFPD is now also, trying to explore the possibility and feasibility to support the ongoing efforts by different Ministries in promoting nutrition security in the country, especially through fortification of foodgrains distributed through Public Distribution System (PDS) directly to the household and to targeted populati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer (Deputy Commissioner, State Tax, Special Circle-7, Jaipur Zone-Il, Zonal Kar bhavan, Jhalana Doongri, Jaipur, Rajasthan 302004) has submitted his comments vide letter dated 24.10.2019 which can be summarized as under: Fortification means deliberately increasing the content of essential micronutrients in a food so as improve the nutritional quality of food and to provide public health benefit with minimal risk to health. Fortified food means a food as specified under the Food Safety and Standards (Food Products and Food additives) Regulation. 2011. that has undergone the process of fortification as per the provisions of these regulations. Micronutrients means essential dietary nutrients including vitamins, minerals or trace elements that are required in very small quantities and are vital to development, disease prevention and wellbeing to human beings Fortified Rice Kernel(FRK): - FRK used for rice fortification is also a value added product made from rice and micronutrient premix. S.No. Goods Name GST Rate HSN Code Chapter No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Milk: Ultra High Temperature (UHT) Milk 5% 0401 04 3. Milk: Condensed Milk 12% 04029110, 02029920 04 FINDINGS ANALYSIS CONCLUSION: While going through the submissions we find that the applicant is a manufacturer and supplier of Fortified Rice Kernel (hereinafter called as FRK). The applicant supplies FRK to various units which are engaged in mixing of the FRK in normal rice which is further supplied to government for use in schemes such as Mid-Day Meal, Poshan Abhiyan, ICDS, PDS etc. We find that, first, source rice for FRK is converted to flour form, then, the premix of vitamin-mineral is added to it. Post mix, the prepared material is passed through a machine which converts it back in to granule form of rice, which are known as Fortified Rice Kernel(FRK). The FRK is packed in a 25Kg bag to be further supplied to various millers/ suppliers with instruction this product should be first mixed (blended) with traditional rice in ratio of 1:100 and then the mixed Hce is cooked and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are eatable/consumable after boil and do not require any other admixing. Both these differentiations do not allow its classification in Chapter 10. Further, preparations/ processes on rice which are beyond the scope of Chapter 10 have been classified in Chapter 19 of GST Tariff. The relevant extract of said chapter note (Chapter 19) is as below- 4. For the purposes of heading 1904, the expression otherwise prepared means prepared or processed to an extent beyond that provided for in the headings of, or Notes to, Chapter 10 or 11. The above note comprehensively puts the process or preparation of rice which are beyond the scope of chapter 10, to be included in Chapter heading 1904. While going through the submissions, it is clearly evident that normal rice has undergone specific mechanical and chemical processing resulting in to FRK. This preparation/ process of FRK is way beyond the scope mandated under Chapter 10 of GST Tariff (i.e. husked, milled, polished, glazed, parboiled or broken). Therefore, though FRK is shaped in form of rice by the mechanized process but it is not rice grain in terms of Chapter 10. To determine the exact classification and rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 049000 - Other Kg 9% 9% 18% Nil On examining the above classification of chapter heading 1904, we find that FRK is classifiable under HSN 19049000 of GST Tariff as other and attracts GST @ 18% (SGST 9% + CGST 9%). The applicant made a contention in submission that Department has treated Fortified Milk' on similar footing to normal milk in GST perspective vide Circular No. 52/26/2018-GST dated 09.08.2018. This contention is not tenable as fortified milk is a final consumable product, while FRK is not. The FRK has to be blended with normal rice in ratio 1:100 and then only gets viable to consume. Further, the structure of milk is not changed because fortified elements like vitamins and other additives are directly mixed in milk which is fit to consume whereas in case of FRK, fortified elements are first mixed in rice flour to manufacture FRK which is further have to be mixed with normal rice. 6. In view of the foregoing. we rule as RULING Fortified Rice Kernels (FRK), manufactured and supplied by the applicant is classifiable under HSN ..... X X X X Extracts X X X X X X X X Extracts X X X X
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