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GST Classification Upheld for Applicant's Mouth Freshener Product The Authority upheld the classification of the applicant's mouth freshener product under Chapter 2106 of the GST Tariff, attracting GST at 18%. The ruling ...
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GST Classification Upheld for Applicant's Mouth Freshener Product
The Authority upheld the classification of the applicant's mouth freshener product under Chapter 2106 of the GST Tariff, attracting GST at 18%. The ruling emphasized consistency in classification under both pre-GST and GST regimes, noting no change in the product. The Authority found the applicant's claim of divergent practices by other manufacturers unsubstantiated and declared the product falls under 'Food preparations not elsewhere specified or included' in Chapter 2106. The ruling stands unless voided under GST Act provisions.
Issues: Classification of goods under GST - Chapter 21 or Chapter 20 - Tax rate disparity.
Analysis: The applicant, engaged in manufacturing mouth fresheners, sought clarification on the classification of their product under the GST regime. The applicant contended that their product, classified under Chapter 2106, attracted GST at 18%, while similar products by other manufacturers were classified under Chapter 20, attracting GST at 12%. The department viewed the product as falling under Chapter 2106. During the personal hearing, the applicant reiterated their submissions. The Authority found the issue fell under Section 97(2)(a) of the CGST Act 2017 and MPGST Act 2017, related to the classification of goods, and admitted the application for consideration.
The Authority noted that the applicant had been classifying the product under Chapter 2106 both before and after the GST rollout, with no change in ingredients or manufacturing process. The applicant's claim of alleged divergent practices in classification by other manufacturers was not substantiated with concrete evidence. Emphasizing the Harmonised System of Nomenclature, the Authority stated that a commodity should have consistent classification under both pre-GST and GST regimes. As there was no change in the product, the Authority upheld the classification under Chapter 2106, attracting GST at 18%.
In the ruling, the Authority declared that the product, described as mouth freshener, would be classified under Chapter 2106 of the GST Tariff as 'Food preparations not elsewhere specified or included' and subject to GST at the applicable rate under the said tariff entry. The ruling was deemed valid unless declared void under the provisions of the GST Act.
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