Tariff classification of Prohance-D turns on its use as a beverage mix, not diabetic food classification.

Prohance-D (Chocolate) was examined by reference to its ingredients, label declarations and market presentation, and was not accepted as diabetic food because it was promoted as offering broader general health benefits rather than meeting the characteristics relied on for that classification. The product was also intended to be mixed with water or milk, so the resulting drink was treated as a non-alcoholic beverage. On that basis, it was classified under Chapter 21 as a compound preparation for making non-alcoholic beverages, not as a cocoa product or Chapter 19 preparation.

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Issues: Whether Prohance-D (Chocolate) is classifiable as diabetic food under Chapter 21 of the Customs Tariff Act, 1975 or as a compound preparation for making non-alcoholic beverages.

Analysis: The product was examined in light of its ingredients, label declarations, and market presentation. Although it was found to be a food preparation and not a cocoa product under Chapter 18 or a Chapter 19 preparation, the Authority held that it was not a diabetic food because it was also promoted as providing multiple general health benefits and did not satisfy the characteristics of diabetic food in the sense relied upon for classification. The Authority further found that the powder is meant to be mixed with water or milk and the resulting drink is a non-alcoholic beverage. On that basis, the product was treated as a compound preparation for making non-alcoholic beverages under Chapter 21.

Conclusion: Prohance-D (Chocolate) is not classifiable as diabetic food; it falls under Chapter 21 as a compound preparation for making non-alcoholic beverages and attracts GST at 18%.

Final Conclusion: The advance ruling determines the product's tariff classification in favour of the Revenue and denies treatment as diabetic food.

Ratio Decidendi: For tariff classification, the product must be classified according to its essential nature and actual description in trade and use; where a preparation is meant to be mixed into a beverage, it may be classified as a compound preparation for making non-alcoholic beverages rather than as diabetic food.

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