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TMI BlogGST ON FLAVOURED MILK, BUT NOT ON LASSIX X X X Extracts X X X X X X X X Extracts X X X X ..... GST ON FLAVOURED MILK, BUT NOT ON LASSI - By: - Dr. Sanjiv Agarwal - Goods and Services Tax - GST - Dated:- 31-8-2021 - - In one of the interesting rulings recently pronounced by Authority for Advance Ruling (AAR), Gujarat, it has been ruled that while flavoured milk is liable to levy of Goods and Services Tax (GST), there is no GST on Lassi (made from milk curd) as it finds mention in the N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 2/2017-CT (Rate) dated 28.06.2017 and is thus exempt from levy of GST. This has been ruled in the advance ruling pronounced on 19.07.2021 in the matter of M/s Sampoorna Dairy and Agrotech LLP. IN RE: M/S. SAMPOORNA DAIRY AND AGROTECH LLP [2021 (8) TMI 784 - AUTHORITY FOR ADVANCE RULING, GUJARAT] , the applicant was involved in manufacture and supply of fermented milk produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, Lassi and sought clarification on classification, taxability and GST rate on Lassi called laban. It sought ruling on the following questions : Whether product manufactured as Lassi but named as laban can be classified as Lassi under Description of Goods? Is the goods taxable or exempted? If exempted, HSN of the product and rate of tax on product. If taxable, HSN of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product and rate of tax on product. Factually, this Valsad-based dairy sold Lassi under the brand name Elan in four flavours - plain (with no sugar or salt added) salted with cumin, strawberry sweetened with sugar, and blueberry sweetened with sugar. The product is Lassi in Indian vocabulary with same contents and characteristics which will be sold in the name of Laban . The proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of manufacture of Lassi involve the following process: Receiving milk in silos. Standardization: Standardization means minimum 3.0% fat and 8.5% SNF are required to prepare curd from cow milk. But in cow milk fat available is 3.7% or 3.8% and SNF 8.2% or 8.3% to maintain the above standard for manufacture of curd standardization. Homogenenization 180 bars (60-65o C). Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... steurization- (90o C for 10 minutes). Curd milk inoculation (with DIV/Bulk culture). Curd fermentation. Curd put in blending machine for mixing from solid form to liquid forms (agitation). Chilling/texturizing and storage (below 50 0 C). Laban filling in bottle or other packing options of various quantities as per the requirement of customers from 150 ml. onwards. Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttle capping, sleeving, coding and web sealing. Palletazation. Cold storage(Below 50 o C). Dispatch through Refrigerated van. It was claimed that subject goods are classifiable under HSN 04039090 and is exempted from GST as they appear at Entry No.26 of Exemption Notification No.2/2017-Central Tax(Rate) dated 28-6-17 which read as follows: S.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HSN Description of Goods 26. 0403 Curds; Lassi; Butter milk The AAR observed that the main ingredients of the Lassi that was being manufacture and sold were curd, water and spices. The ingredients displayed on the bottle were pasteurized toned milk, spices, pudina, green chilli, salts, active cultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, added nature-identical flavour and stabilizer. The bottle displayed that is was a dairy-based fermented drink . The AAR also noted that HSN Code 0403 reads as follows: 0403 Buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavoured or containing added fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uit, nuts or cocoa 0403 10 00 - Yogurt 0403 90 - Other: 0403 90 10 --- Butter milk 0403 90 90 --- Other The AAR further noted that as per explanatory notes to HSN 0403, the scope of HSN covers butter-milk, and all fermented or acidified milk and creams and includes curdled milk and cream, yogurt and kephir. The products of this heading may be in liquid, paste or solid(including froz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en) form and may be concentrated (e.g. evaporated or in blocks, powder or granules) or preserved. Fermented milk under this heading may consist of milk powder of heading 0402 containing small quantities of added lactic ferments, with a view to its use in prepared meat products or as an additive for animal feed. Acidified milk in this heading may consist of milk powder of heading 0402 containing sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all quantities of added acid(including lemon juice) in crystal form in order to produce curdled milk on reconstitution with water. The products of this heading may also contain added sugar or other sweetening matter, flavourings, fruit (including pulp and jams), nuts or cocoa. Based on the contents and manufacturing prices, the AAR therefore, held that goods Lassi is described at S.No.26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Notification No.2/2017-Central Tax (Rate) dated 28-6-17 . It is however, amusing that fermented and flavoured Lassi is exempt but flavoured milk is taxed @ 12% GST. It has been earlier ruled by AAR, Gujarat IN RE: M/S. GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD. [2021 (4) TMI 595 - AUTHORITY FOR ADVANCE RULING, GUJARAT] dated 20.01.2021 that flavoured milk processed from milk, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugar and permitted flavours is covered under HSN Code 22029930 and is liable to be taxed to GST@ 12%, though both belong to the category of dairy products and flavoured drinks. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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