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TMI Blog2024 (10) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... ding 2106. It is also apparent that powders for ice-creams and similar preparations are also covered under Heading 2106. Further. preparations consisting of milk powder, sugar and any other added ingredients are also included under Heading 2106. Powder for table cream, jellies, ice-cream and similar preparations, whether or not sweetened are also included in Heading 2106. It is also evident that the product in question cannot be termed as a dairy produce. The product i.e. Vanilla Mix - dried softy ice cream mix (low fat) in vanilla flavour is classifiable under Heading 2106 90 99 of the First Schedule to Tariff Act attracting tax at the rate of 9% of CGST and 9% of SGST. - MAHIPAL SINGH AND MAHESH KUMAR GOWLA, MEMBER Present for the Applicant Adv. Narendra Singhvi, Adv. Shrishti Agarwal. Note 1: 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. Note 2: 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 cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portion for the required time and speed in a mechanical mixer. c. Quality check The mixture obtained above will thereafter be subjected to sensory evaluation, metal detection and moisture determination. Mixtures, which will pass the evaluation, shall be proceed ahead for packing. d. Packing and dispatch Mixtures, which will be received after a quality check, will undergo the primary packing and thereafter will be packed in cartons. The cartons will, subsequently, be stored in godown from where they will be dispatched after micro-testing. 5. Vanilla Mix will be sold in packages not exceeding 1kg to institutional buyers, who will use the same to produce soft serves using softy making machines. Further, Vanilla Mix will not be sold through confectionery outlets. B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) 1. At the outset, it is made clear that the provisions of both CGST Act and RGST Act and rules made there under are same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the RGST Act and vice versa. 2. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otes. 12. In the instant case, the relevant Heading of the First Schedule to CT Act ( CH ) for classification of Vanilla Mix is Heading 0404. 13. Heading 0404 inter alia covers products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included . 14. Heading 0404 seeks to cover within in its ambit, products which consist of natural milk constituents, thus as long as any product contains natural milk constituents, it shall be classified under Heading 0404. 15. It is submitted that Vanilla Mix is classifiable under Heading 0404 only. Description of this heading, as already noted, covers products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter. In other words, a product, which has natural milk constituents, shall be classifiable under Heading 0404, irrespective of presence of other ingredients therein. In the instant case, Vanilla Mix has amount 34% of milk solids, which is a natural milk constituent, and thus, it is classifiable under Heading 0404. 16. Even otherwise, it is submitted that milk solids, a natural milk constituent, is the essentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continue to remain classified under Heading 0404. 25. The expression not elsewhere specified or included , would mean either coverage by name or by description in some other heading of Rate Notification or tariff and not any general expression. In present matter, the product i.e., Vanilla Mix is not specified elsewhere in the tariff either by name or by description. Hence, Vanilla Mix is liable to be classified under Heading 0404. 26. In this regard, reliance is placed upon judgment of Hon ble Supreme Court in Commissioner of Central Excise vs. Amrit Food, 2015 (324) E.L.T. 418 (SC), wherein it was held that soft serve mix and milk shake mix are liable to be classified under tariff Heading0404. 27. The judgment of Hon ble Supreme Court in Amrit Foods (supra) was also followed in Samianka Foods Pvt. Ltd. vs. CC, Chennai-IV, 2017 (11) TMI 1320 - CESTAT Chennai. 28. Thus, it is submitted that the product in present matter i.e., Vanilla Mix is liable to be classified under Heading 0404. Accordingly, Heading 0404 is mentioned at Sr. No. 10 of Schedule I to Rate Notification and the rate of tax applicable on the supply of Vanilla Mix under Section 9 (1) of CGST Act is 2.5%. C. QUESTIONS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l number 10 of Notification Number 1/2017-Central tax (Rate), dated 28.06.2017. 4. The reasoning given by the applicant for classification of the product under Heading 0404 is as follows: (i) Heading 0404 covers products consisting of natural milk constituent whether or not containing added sugar or other sweetening matter not elsewhere specified or included. (ii) The product consists of milk solids which is a natural milk constituent. (iii) The product consists of 34% milk solids i.e. skimmed milk powder which is a natural milk constituent and 61.2% sugar while the remaining 4.8% would be stabilisers, anti-caking agents and flavouring agents; (iv) The essential ingredient of the product is milk solids which forms the basis of the product; (v) Too low or too high levels of milk solids may have textural problems and, thus, milk solids play a vital role in the product and accordingly, milk solids is an essential ingredient of the product: (vi) Classification should be decided based on the main ingredient/essential character of the product which in the instant case is liquid milk; and (vii) The expression not elsewhere specified means either coverage by name or description in some oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said process to obtain the desired edible preparation is the key factor that should determine the classification of the product to be manufactured by the applicant. 6.3. Chapter Note 5 of Chapter 21 of the First Schedule to the Tariff Act provides in detail as to which type of edible preparations can be covered under Heading 2106. The said Chapter Note specifies. inter-alia, that Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter-alia, includes:- (a) protein concentrates and textured protein substances; (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; (c) preparations consisting wholly or partly of foodstuffs, used in making of beverages of foods preparations for human consumption; (d) powders for table creams. jellies, ice-creams and similar preparations, whether or not sweetened; xxxxx . 6.4 Perusal of the said Chapter Note 5 would reveal that preparation for use for human consumption, even if required to be subjected to further processing are to be covered under Heading 2106. Similarly, powders for ice-creams and similar preparations are also covered un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of supply so far as classification of a product in question is concerned. However, the nutritional information given for per serve percent recommended dietary requirement for average adult per day and the suggested instructions for use of the item by the consumer clearly establish that the proposed product is an edible food preparation for human consumption only. 9. Thus, it is submitted that the proposed product is appropriately classifiable under Heading 2106 90 99 of the First Schedule to Tariff Act attracting tax at the rate of 9% of CGST and 9% of SGST and the Hon ble Advance Ruling Authority may kindly like to consider the above submissions suitably while deciding the advance ruling application submitted by M/s. VRB Consumer Products Private Limited, SP-17. RIICO Industrial Area, Neemrana, District-Alwar who has filed the FORM GST ARA-01 dated 20.03.2024. F. FINDINGS ANALYSIS CONCLUSION: 1) We have carefully examined the statement of facts, supporting documents filed by the applicant along with the application, oral and written submissions made at the time of hearing and the comments of the Central Tax Authority. We have also considered the issues involved, on which advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssified under Heading 0404. 4) We next take up the classification of dried softy ice cream mix (low fat) in vanilla flavour . We find that the classification of goods under GST regime has to be done in accordance with the Customs Tariff Act, 1975, which in turn is based on Harmonized System of Nomenclature, popularly known as HSN . The rules of interpretation, section notes and chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for classification of Goods under GST regime. once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST by the respective Governments. 5) We find that the product in question is dried softy ice cream mix (low fat) in vanilla flavour named as Vanilla Mix . We find that the constituent of the product is Sugar-61.2%, Milk Solids-34%. Other ingredients viz. stabilizers. anti-caking agents, citrus fibre. iodised salt, Natural flavouring substances (Vanilla)-4.8%. We find that Chapter 4 of the First Schedule to the Tariff Act is meant for Dairy Produce ; birds eggs; natural honey; edible product of animal origin, not elsewh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended to use for making of soft serves, each Ingredient has a specific role to make the soft serve smooth and creamy in texture. Further. it is also conclusive that not only the contents of the product in question but the processing done in the soft serve machine also play a vital role in giving the smooth and creamy texture characteristic of soft serves. 8) In view of above, we find that the submissions made by the applicant are not enable and the product in question does not fall under the Heading 0404. 9) Further, we find that Chapter 21 of the First Schedule to the Tariff Act covers Miscellaneous edible preparations which is clearly distinguishable from products of animal origin , the basic difference being the nature of products in question. While Chapter 4 covers products of animal origin which means that the products are normally natural or near to natural in their nature and not much processing has been done thereupon, on the other hand Chapter 21 covers prepared foodstuffs which means that those items of animal origin have been subjected to some processing which and the resultant product has acquired the nature of being prepared foodstuff etc. 10) Chapter Note 5 of Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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