Appellate ruling: Ada classified as 'Seviyan' under HSN Code 1902, subject to 5% GST

The Appellate Authority for Advance Ruling ruled that Ada should be classified under HSN Code 1902 as "Seviyan (Vermicelli)" at 5% GST, aligning with the CGST Member's classification. The decision was based on the similarity between Ada and Vermicelli, following the General Rules of Interpretation and Supreme Court precedents on classification principles. This outcome provides clarity on the tax rate applicable to Ada under the GST Tariff.

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Issues: Classification of the commodity "Ada" under the GST Tariff - Whether to classify under HSN Code 1902 as "Seviyan (Vermicelli)" at 5% GST or under the residual entry at 18% GST.

Analysis:
1. The applicant, a wholesale distributor of Ada, sought an Advance Ruling on the tax rate of Ada, arguing its similarity to Seviyan (vermicelli) used in making sweet dishes.
2. The applicant presented a judgment equating ada and vermicelli, emphasizing ada's use in sweet dishes popular in Kerala.
3. The CGST Member classified Ada under HSN 1902 at 5% GST, while the SGST Member opted for the residual entry at 18% GST due to lack of specific mention.
4. Due to the disagreement, the matter was referred to the Appellate Authority for Advance Ruling for further clarification.
5. After a hearing, it was established that Ada and Seviyan (vermicelli) are similar products made from maida or rice flour, used for enriching regional sweet dishes.
6. The classification issue was analyzed based on the General Rules of Interpretation of the Customs Tariff Act, 1975, and relevant Supreme Court judgments on classification principles.
7. The Supreme Court precedents highlighted that goods should be classified under specific entries if applicable, with the residuary entry as a last resort.
8. Applying Rule 4 of the General Rules of Interpretation, Ada was deemed akin to Vermicelli and classified under HSN 1902 at 5% GST.
9. The final ruling classified Ada under HSN 1902 as Seviyan (Vermicelli) at 5% GST, aligning with the CGST Member's initial classification.

This detailed analysis of the judgment clarifies the classification of Ada under the GST Tariff, emphasizing the application of legal principles and precedents to determine the appropriate tax rate for the commodity.

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