9911796707
TMI Blog2023 (2) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... as the CGST Act and KGST/SGST Act respectively). The applicant is engaged in the business of manufacture/production and supply of frozen food in institutional packs to companies in Aviation Industries, quick service restaurants, Hotels etc., across Ready To Eat (RTE)/ Ready To Cook (RTC)/ Processed and Semi Processed categories. 3. The applicant has sought advance ruling in respect of the following question:- i. Applicable GST rate on their products. 4. Admissibility of the application: The question is about the "determination of the liability to pay tax on any goods or services or both" and hence is admissible under Section 97(2) (e) of the CGST Act 2017. 5. BRIEF FACTS OF THE CASE: The applicant furnishes some facts relevant to the issue: 5.1 The applicant states that SATS Limited, Singapore is engaged in providing food solutions and gateway services in Asia. They have presence in 13 countries and cater to aviation sector, institutional catering, quick service restaurants and hotels. 5.2 The applicant states that SATS Limited, Singapore has set up a new wholly owned subsidiary in India as SATS Food Solutions India Private Limited (SFSI for brevity) to provide food solution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing time for the frozen products (under RTE/RTC/Processed/Semi Processed category) is 36 to 48 hours. 5.6. The Applicant has also stated that they have Frozen Ready-to-eat (RTE), Frozen Ready To Cook (RTC) Foods, Frozen Processed Food Products and Frozen Semi Processed Food Products and has explained about each one of them and the same is reproduced below: a) Frozen Ready to Eat Products (Ready-to-eat (RTE) Frozen Ready to Eat Products (Ready-to-eat (RTE) food products are processed food products that are pre-cleaned, precooked, packaged but not ready for consumption without thawing, heating, reportioning, and repacking. Moreover, these products are sold to B2B businesses having any dine- in facility or direct access to consumers. Also, the products have longer shelflife as they are stored in -18 degree Celsius. Example: Frozen Dal Tadka, Frozen Zafrani Murg Naan Foldover, Frozen Chilli Chicken Naan Foldover, Frozen Chana Masala, Frozen Mix Vegetable Fried Rice etc. b) Frozen Ready To Cook Foods Frozen Ready to Cook Foods are manufactured food products which need post manufacturing preparation like thawing, cooking, and addition of vegetables / protein at institutional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant is of the view that branded items attracts a higher rate of tax as compared to unbranded items which attracts lower rate of tax. But when the bulk quantity of food product is supplied in B2B format in a package which bears the company's brand name, i.e., "SATS", it would naturally attract higher rate of tax. This also goes to prove that the food supplies of SFSI would not be a restaurant service. 6.2 The applicant submits that as the package in which the food products are packed bears the Company's brand name, "SATS", compliance and registration under Legal Metrology Act 2009 and Legal Metrology (Packaged Commodities) Rules, 2011 are fulfilled. On this basis also, food products supplied by SFSI in B2B format would not be a restaurant service so as to attract lower rate of tax with no ITC. 6.3 The applicant has stated that most of the food items manufactured by SFSI are classifiable either under HSN Code 2007 or under HSN Code 2106 90 99- other food preparation not elsewhere specified or included and is liable to GST at the rate of 12% or at the rate of 18% of Schedule II and Schedule III of Notification No.01/2017-Central Tax (Rate) dated 28-06-2017. 6.4 The applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a product, and are as follows:- (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975(51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. Accordingly we make a reference to the section notes and chapter notes of the relevant chapters of the Customs Tariff and also the corresponding Harmonised Commodity Description and Coding system explanatory notes of World Customs Organisation. 12. We observe that Section IV of Customs Tariff Act, 1975 covers Prepared foodstuffs; Beverages, spirits and vinegar; Tobacco and manufactured tobacco substitutes; Products, whether or not containing nicotine, intended for inhalation without combustion; Other nicotine containing products intended for the intake of nicotine into the human body. Chapter 21 of the said Act covers Miscellaneous edible preparation and tariff hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of ready to cook (RTC) food, which are processed food products which need post manufacturing preparation like thawing, cooking, and addition of vegetables / protein at institutional buyer's end. 14. Since the applicant is into manufacture of ready to eat and ready to cook food products, the same are covered under explanation 5(b) mentioned supra at para 13 which is preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption. Thus the food products manufactured by the applicant are covered under tariff heading 2106 and hence exigible to GST at 18% (CGST 9% and SGST 9%) as per entry No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28.06.2017 and the same is reproduced below: Schedule III -9% S.No. Chapter / Heading / Sub-heading / Tariff item Description of Goods 23. 2106 All kinds of food mixes including instant food mixes, soft drink concentrates, Sharbat, Betel nut product known as "Supari", Sterilized or pasteurized millstone, ready to eat packaged food and milk containing edible nuts with sugar or other ingredients, Diabetic foods; [other th ..... 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