Tax exemption for unbranded parched/puffed gram under CGST & Karnataka GST Acts clarified by Advance Ruling Authority.

The Advance Ruling Authority determined that unbranded parched/puffed gram is exempt from tax under the CGST Act and Karnataka GST Act. However, if the product is branded and packaged, it is subject to a 2.5% tax under both Acts. The ruling clarified the confusion within the business community regarding the tax status of the product and aligned with Circular No. 113/32/2019-GST, which specified the classification criteria for leguminous vegetables subjected to mild heat treatment without additional ingredients falling under HS Code 0713.

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Issues:
- Applicable rate of tax (GST) on parched/puffed gram (Hurigadale/Putani)

Analysis:
1. Issue: Applicable Rate of Tax
- The applicant sought an advance ruling on the applicable GST rate for parched/puffed gram (Hurigadale/Putani).
- The applicant clarified that the process involves mild heat treatment without the addition of salt or oil.
- Circulars issued by the Central Board of Indirect Taxes and the Commissioner of Commercial Taxes were referenced to determine the classification under HS Code 0713.
- The applicant highlighted confusion within the business community regarding the exemption status of the product.

2. Findings & Discussion:
- The Authority examined the process of manufacturing "Fried Gram" or "Hurigadale/Putani" and confirmed that it involves only dry heat treatment without the use of salt or oil.
- Referring to Circular No. 113/32/2019-GST, it was established that leguminous vegetables subjected to mild heat treatment without additional ingredients fall under HS Code 0713.
- The product in question, "Puffed Gram," commonly known as "Fried Gram" or "Hurigadale/Putani," aligns with the classification criteria specified in the Circular.
- The Circular further stipulates that branded and packaged products attract a 5% GST rate, while unbranded goods are exempted from GST.

3. Ruling:
- The Advance Ruling Authority ruled that unbranded parched/puffed gram is exempt from tax under the CGST Act and Karnataka GST Act.
- However, if the product is branded and packaged in unit containers, it is liable to a 2.5% tax under both the CGST Act and the Karnataka GST Act.

This detailed analysis of the legal judgment addresses the issue of the applicable rate of tax on parched/puffed gram, providing a comprehensive overview of the applicant's contentions, relevant circulars, findings, and the final ruling by the Authority for Advance Ruling, Karnataka.

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