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TMI Blog2023 (1) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... rading shall be done to remove the small size potatoes. Then machine-based washing shall be done to remove dust and dirt from potatoes. Then Peeling machine shall remove the thin layer of skin from the potatoes and again a machine based washing shall be done to completely remove the peel from potato. * During this process extra water and starch shall be extracted, as a by-product. Then slicing machine shall slice, the peeled potatoes into uniform slices and such slices shall be passed from vibrator machine to again remove extra water and starch from sliced potatoes. * Then potato slices shall be fried in fryer machine in continuous deep fry at 180-187 °C temperature, which shall convert the potato slices into fried potato chips. Then manual sorting of damaged chips shall be done and then seasoning with various masala or flavors shall be done of such fried chips and then final packing of such potato chips shall be done in unbranded plastic bags, which it to be sold to customers. II. Potato Sev (Aloo Sev) :- * Frist of all Dry mixture of Longi Mirch (Eagle Eye Chilly), White Salt, Turmeric powder, Potato Flakes, Gram flour, Starch powder and Rice flour is prepared by Siev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easoning applicator to add various spices flavors and then packed in plastic unbranded bags of different size and weights . which is to be sold to customers. V. Sev Mamara (Roasted Puffed Rice with Nylon Sev):- * Frist of all Sorting of raw puffed rice is done to remove damage & faulted material. * Then puffed rice is roasted on medium heat. * Then roasted puffed rice are polished with hot oil uniformly. * Then roasted and polished puffed rice material is transfered into the seasoning drum and seasoning of various flavors is done. * Then pre-prepared nylon sev is mixed with the seasoned and roasted puffed rice as per standard ratio in mixing drum. * Then it is packed in plastic unbranded bags of different size and weights, which is to be sold to customers. VI. Fried Chana Daal (Split Bengal Gram),- * First of all Repeated washing by water for approx 10 times is done for raw Split Bengal gram (chana Daal) * Then soaking of water for 8-10 hours is done for washed chana Daal. * Dewatering is done for soaked Daal with filtration machine. * Then soaked chana daal is deep fried in hot oil at 190°C +/- 5°C. For 15-20 second. * Then it is put on de-oiling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Edible Oil Make dough into dough Mixer (Drymix + Water) Take into Tray Tranfer to Fryer for Frying QC Person Testing Bhatti Oil FFA, PV Extrusion from Extruder Seive into fryer Heat oil Frying at 178° +/- 2°C for 100 +/- 20 Second Collect into Clean Bucket with Liner 6. Bundi Make Dry mix of Pea Floor, Gram Flour Coarse Make Slurry into dough Mixer (Dry mix + Water) Take into Tray Transfer to Fryer for Frying QC Person Testing Bhatti Oil FFA, PV Drop the prepared Slurry by Sieve into fryer Heat oil Frying at 178° +/- 2°C for 180 +/- 15 Second DE oiling by Centrifuge & Collect into Clean Bucket with Liner 7. Rice Flake Take Sorting rice flakes into Batch fryer Frying at 210° +/- 5°C for 10 - 12 Second Mix turmeric powder Collect into Clean Bucket with Liner 8. Red Peanut Take Sorting Red Peanut into Batch fryer Frying at 170° +/- 5°C for 3- 4 Minute Mix turmeric powder Collect into Clean Bucket with Liner * Then All above mentioned semi-Finished Products are mixed in Tumbler & Seasoning is done with Sugar, Mango Powder, Citric Acid, White Salt, Black Salt, Turmeric Powder, Fennel seeds in it. * Then the final mixture is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.1 Doubts have been raised whether mild heat treatment of leguminous vegetables (such as gram) would lead to change in classification. 3.2 Dried leguminous vegetables are classified under HS code 0713. As per the explanatory memorandum to the HS 2017, the heading 0713 covers leguminous vegetables of heading 0708 'which have been dried, and shelled, of a kind used for human or animal consumption (e.g., peas, chickpeas etc.). They may have undergone moderate heat treatment designed mainly to ensure better preservation by inactivating the enzymes (the peroxidases in particular) and eliminating part of the moisture. 3.3 Thus, it is clarified that such leguminous vegetables which are subjected to mere heat treatment for removing moisture, or for softening and puffing or removing the skin, and not subjecting to any other processing or addition of any other ingredients such as salt and oil, would be classified under HS code 0713. Such goods if branded and packed in a unit container would attract GST at the rate of 5% [S. No. 25 of notification No. 1/2017- Central Tax (Rate), dated 28-6-2017]. In all other cases such goods would be exempted from GST [S. No. 45 of notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y), White Salt, Turmeric powder, Potato Flakes, Gram flour, Starch powder and Rice flour. Thus, the final product is totally different from anyone specific basic ingredient used to manufacture the same. 2.2 The Final product of Aloo Sev (Potato Sev) is being sold in market as "Namkeen" only, and commonly it is used a savory snacks only. And as discussed in detailed in Justification Reply for Question no -1 above, when the "Namkeen" or similar other edible preparations in ready for consumption form are sold without brand name, then it shall be classified under entry No 101 A of schedule -1 of Notification No 01/2017-Central Tax (Rate) - dated 26.06.20217 and thus shall be liable to GST rate of 5%. 2.3 Thus "Aloo Sev (Potato Sev)" shall be classified under tariff item No 2106 90 99 and is liable for GST rate of 5 % when sold without brand name. For Question No: 3 (For Potato Chivda [Potato Salli Mixture]) : 3.1 As per the manufacturing process described in statement of facts, it is clear that Potato Chivda [Potato Salli Mixture] is manufactured with various raw materials like raw potato, sugar, rock salt, red chili, green chili, turmeric powder, fried masala Sabu dana, raisin, Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as "Namkeen" or "Mixture" only, and commonly it is used a savory snacks only. And as discussed in detailed in Justification Reply for Question no -1 above, when the "Namkeen", "Mixture" or similar other edible preparations in ready for consumption form are sold without brand name, then it shall be classified under entry No 101 A of schedule -I of Notification No 01/2017- Central Tax (Rate) -dated 26.06.20217 and thus shall be liable to GST rate of 5%. 5.3 Thus "Sev Mamara [Roasted Puffed Rice mixed with Nylon Sev]" shall be classified under tariff item No 2106 90 99 and is liable for GST rate of 5 % when sold without brand name. For Question No; 6 (For Fried Chana Daal (Split Bengal Gram]): 6.1 As per the manufacturing process described in statement of facts, it is clear that Fried Chana Daal [Split Bengal Gram] is manufactured with various raw materials like Split Bengal Gram, edible oil, water and various spices. Thus, the final product is totally different from anyone specific basic ingredient used to manufacture the same. 6.2 The Final product of Fried Chana Daal [Split Bengal Gram] is being sold in market as "Namkeen" only, and commonly it is used a savory snacks only. And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in ready for consumption form are sold without brand name, then it shall be classified under entry No 101 A of schedule -1 of Notification No 01/2017- Central Tax (Rate) - dated 26.06.20217 and thus shall be liable to GST rate of 5%. 8.3 Thus, "Khata Mitha Chevda Mixture" shall be classified under tariff item No 2106 90 99 and is liable for GST rate of 5 % when sold without brand name. For Question No: 9 (For Dry Starch Powder): 9.1 As per the manufacturing process described in statement of facts, it is clear that starch is being produced as By-Product while manufacturing of other food items from raw potatoes. Then further process is done to convert the said potato starch in to Dry form of starch powder. 9.2 Entry No 18 of Schedule -2 (for 12 % GST Rate) of NOTIFICATION NO. 1/2017-CENTRAL TAX (RATE), DATED 28-6-2017 is reproduced here under : SI. No. Chapter/ Heading/ Sub-heading/ Tariff item Description of Goods 18. 1108 Starches; inulin Detailed entry of Chapter -11 of PRODUCTS OF THE MILLING INDUSTRY; MALT; STARCHES; INULIN; WHEAT GLUTEN is as under : Tariff Item Description of goods Unit 12% IGST/6% CGST/6% SGST or UTGST : 1108 : Starches; inulin 1108 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions made by the Applicant in their application for advance ruling as well as the submissions made by authorised signatory, during the personal hearing proceedings on 26-9-22 before this authority. We also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts & the applicant's interpretation of law. 8. At the outset we would like to make it clear that the provisions of CGST Act and GGST Act are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the GGST Act. 9. We find that the issue before us is to determine the classification and applicable GST rate of un-branded product viz. salted and flavored Potato Chips, Potato Sev (Aloo Sev), Potato Chivda (Potato Salli Mixture), Sing Bhujiya, Sev Mamara (Roasted Puffed Rice with Nylon Sev), Chana Daal (Fried split Bengal Gram), Gathiya, Khatta Mitha Chevda Mixture and Dry Starch Powder. 10. The applicant has submitted that they intend to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ED 2106 10 00 - Protein concentrates and textured protein substances 210690 - Other: --- Soft drink concentrates: 2106 90 11 --- Sharbat 2106 90 19 --- Other 2106 90 20 --- Pan masala 2106 90 30 --- Betel nut product known as "Supari" 2106 90 40 --- Sugar-syrups containing added flavouring or colouring matter, not elsewhere specified or included: lactose syrup: glucose syrup and malto dextrine syrup 2106 90 50 --- Compound preparations for making non-alcoholic beverages 2106 90 60 --- Food flavouring material 2106 90 70 --- Churna for pan 2106 90 80 --- Custard powder --- Other: 2106 90 91 --- Diabetic foods 2106 90 92 --- Sterilized or pasteurized millstone 2106 90 99 --- Other 12.3 It is observed that those food preparations, not specified or included elsewhere in the tariff being preparations for use either directly or after processing for human consumption are to be classified under this head. Therefore, it is evident that the entry is a residuary entry in respect of edible preparations and hence the edible preparations shall be classified under, this entry only if the same are not classifiable under any of the other specific entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belled" shall be substituted: 13.2 After the said amendment Entry No. 101A of Not. No. 1/2017-CT (Rate) dated 28-6-2017 with effect from 18-7-22 is read as under: Schedule-II {GST Rate @ 5%} 101A. 210690 Namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form other than those pre-packaged and labelled. 13.3 The clause (ii) of explanation of Not. No. 6/2022-CT (Rate) dated 13-7-2022 has defined the meaning of 'pre-packaged and labelled'. Clause (ii) of explanation is reproduced as under :- '(ii) The expression 'pre-packaged and labelled' means a 'pre-packaged commodity" as defined in clause (1) of section 2 of the Legal Metrology Act, 2009 (1 of 2010) where, the package in which the commodity is pre-packed or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act,2009 (1 of 2010) and the rules made thereunder. ' 13.4 We find that the applicant supply its food product in packages (plastic bag) of pre-determined weight and have mandatory declarations which required as per the Legal Metrology Act,2009 (1 of 2010) and the rules made there under. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... packaged and labelled' for the purpose of GST levy on food items like pulses, cereals, and flours? For the purposes of GST, the expression 'pre-packaged and labelled ' means a 'pre-packaged commodity' as defined in clause (1) of section 2 of the Legal Metrology Act, 2009, where the package in which the commodity is pre packed, or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act and the rules made thereunder. Clause (1) of section 2 of the Legal Metrology Act reads as below: (1) "pre-packaged commodity" means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre determined quantity. Thus, supply of such specified commodity having the following two attributes would attract GST: (i) It is pre-packaged; and (ii) It is required to bear the declarations under the provisions of the Legal Metrology Act, 2009 (1 of 2010) and the rules made there under. However, if such specified commodities are supplied in a package that do not require declaration(s)/compliance(s) under the Legal M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed split Bengal Gram), Gathiya and Khatta Mitha Chevda Mixture is pre-packaged and labelled, therefore covers under entry No. 46 of Not. No. 1/2017-CT (Rate) dated 28-6-2017 as amended vide Not. No. 1/2017-CT (Rate) dated 28-6-2017 of Schedule-II attracts tax rate of GST @12% with effect from 18-7-2022. 14. We, now take up the question of determination of classification of potato starch and applicable tax rate of GST for discussion. 14.1 The applicant has own submitted that Potato Starch is produced as by-product during the manufacturing process of Potato Chips, Potato Sticks and Allo Sev. This Starch is converted into dry form by carrying out the certain manufacturing process which is shown in Para 2(ix) of the Ruling. We refer to CTH 1108 of Customs Tariff Act, 1975 in which Starches and Inulin are classified. CTH 1108 is read as under: 1108 STARCHES; INULIN - Starches : 1108 11 00 -- Wheat starch 1108 12 00 -- Maize (corn) starch 1108 13 00 -- Potato starch 1108 14 00 -- Manioc (cassava) starch 110819 -- Other 1108 19 10 --- Sago 11081990 --- Other 1108 20 00 - Inulin 14.2 We find that the Potato Starch has specific entry in tariff and merits classi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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