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TMI Blog2021 (12) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... o far as may be, apply to the interpretation of this notification. The list of goods to he sold from the Pan shop include all kinds of goods that are normally bought from a Pan Shop. Accordingly, one of the goods that shall be sold from the applicant's Pan Shop is Gutka, containing Tobacco or otherwise. The Gukta is a preparation of betel nuts and any one or more of lime, katha (catechu) and tobacco whether or not containing any other ingredient, such as cardamom. copra or menthol, which is same as Pan Masala discussed supra. In a Pan shop the seller also generally makes a product akin to Gutka themselves by mixing of betel nuts, lime, kattha and tobacco containing or not containing other ingredients are sold which amounts to manufacture of Gutka. Preparation of Gutka in the Pan Shop is akin to manufacture on account of the process of preparation being that of mixing of different bought out ingredients 4nd the resultant product having a distinct name and use - the preparation of Gutka at the Pan Shop for sale is covered in the Second Proviso of Notification No. 14/2019-CT. In the Table given in Notification No. 14/2019-CT both Pan Masala and goods covered under Chapter 24 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson engaged Pan Masala and Tobacco products Trading under the composition scheme? 4.3. What will be applicable tax rate on the supply of such Pan Masala or Tobacco products as any other supplier eligible for composition levy under sub-sections (1) and (2) of section 10 in the Composition scheme? 4.4. Whether Tax rate prescribed under Notification No. 50/2020 is applicable on any other supplier eligible for composition levy under sub-sections (1) and (2) of section 10 is applicable on the above-mentioned class of assessee who are engaged in Trading of Pan Masala or Tobacco Products? 5. DEPARTMENT'S VIEW POINT- No view from the jurisdictional officer was communicated to this authority. 6. RECORD OF PERSONAL HEARING - 6.1 Mr. Rachit Bhandari, Chartered Accountant and the jurisdictional officer (SGST) appeared for personal hearing through virtual hearing. Mr. Rachit reiterated the submissions already made in the application. and attached additional submissions as follows: 6.2. As per Section 10 of the CGST Act, 2017 A registered person is eligible is eligible for Composition scheme if aggregate turnover in the preceding Financial year does not exceed ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can opt for composition scheme. Further section 10, clearly describes that the manufactures of tobacco, ice cream, pan masala and aerated waters cannot opt for composition scheme. However, law does not restrict the class of persons of dealers or traders of tobacco. ice cream, pan masala and aerated water to opt for eligible scheme. 6.8 If the assesse is eligible for the composition scheme, then under which HSN code do the assesse have to apply for registration as GSTN portal does not allow composition taxpayers to add the HSN codes of pan masala, tobacco products or ice cream because GSTN Portal does not bifurcate between the manufacturers and traders of tobacco, ice cream, pan masala and aerated waters. Due to this issue even if the assesse is eligible for composition scheme, the assesse cannot take the benefit of the composition scheme. 6.9 Since, HSN code of Pan Masala: 2106, HSN code of Tobacco: 2401 comes under the following chapters which do not allow to opt for composition scheme. SO, which HSN codes does we need to obtain in order to become eligible for composition scheme. 6.10. At the time of personal hearing on 28 July 2021 Applicant submitted a letter for withdr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to Composition. as contained in Section 10 of the GST Act, 2017 contains certain conditions, the presence of which excludes a person from taking the benefit of this scheme of Composition. One such conditions is given in Section 10(2)(b) which states that the benefit of this scheme shall not be available to a person who is engaged in the supply of goods that are not leviable to tax under this Act. 7.5. The applicant has stated vide its letter dated 02.09.201 that it shall he engaged in the supply of Pan (betel leaves). As per Entry No. 93 in Notification No. 02/2017-Central Tax (Rate), Pan or Betel Leaves as they are known. is taxed at NIL rate under this Act. The entry is given herein below: S.No. Chapter / Heading / Sub-heading / Tariff item Description of Goods (1) (2) (3) 93. 1404 90 40 Betel leaves 7.6. Supplementary Note - 1 to Chapter 21. of the Customs Tariff contains the definition of Pan Masala. The extract is as under: 1. In this Chapter, Pan Masala means ..... X X X X Extracts X X X X X X X X Extracts X X X X
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