Specific tariff classification for flavoured milk prevails over broader dairy entry, fixing GST at the Chapter 22 rate.

Flavoured milk was classified under tariff item 2202 90 30 as a beverage containing milk rather than under tariff item 0402 99 90 as milk and cream with added sugar or other sweetening matter. The authority applied the Customs Tariff structure and the GST rate notification, noting that the product had earlier been treated under Chapter 22 and that the more specific tariff entry prevails over a broader competing dairy entry. On that basis, Chapter 04 was held inapplicable and the applicable GST rate was 12% under Entry 50 of Schedule II of Notification No. 1/2017-Central Tax (Rate).

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Issues: Whether flavoured milk is classifiable under tariff item 2202 90 30 as a beverage containing milk or under tariff item 0402 99 90 as milk and cream containing added sugar or other sweetening matter, and the GST rate applicable thereto.

Analysis: The product was examined in the light of the tariff structure under the Customs Tariff Act and the GST rate notification. The authority noted that flavoured milk had earlier been placed under Chapter 22 in the excise regime as flavoured milk of animal origin and that the competing GST entries were Entry 8 of Schedule I for Chapter 04 and Entry 50 of Schedule II for Chapter 22. On the facts and the process described by the appellant, flavoured milk was treated as a prepared beverage containing milk. The authority held that Chapter 04 could not be applied because the product was already specifically covered by Chapter 22, and the more specific classification governed the matter.

Conclusion: Flavoured milk is classifiable under tariff item 2202 90 30 as a beverage containing milk and attracts 12% GST under Entry 50 of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.

Final Conclusion: The appeal failed and the lower ruling on classification and tax rate was upheld.

Ratio Decidendi: Where a product is specifically covered by a tariff entry, that specific classification prevails over a broader competing dairy entry for GST rate purposes.

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