Classification dispute: Unbranded flour mixtures under GST codes. Exemption vs. taxable blending.

The case involved the classification of unbranded mixtures of flour of pulses and grams under HSN Codes 1106 and 1102 for GST purposes. The applicant argued for exemption under these codes, while the Central Authority contended that the blending constituted "Preparation of flour" under HSN 1901 taxable at 18%. The mixtures provided by the applicant were classified under specific tariff headings, primarily CTH 1102 and CTH 1106, with different GST rates applicable based on whether they were sold with or without a registered brand name.

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Issues Involved:
1. Classification of unbranded mixture of flour of pulses and grams under HSN Code 1106 and 1102.
2. Clarification of GST rate for flour mixture of grams, pulses, leguminous vegetables with cereal flour/rice flour and its HSN Code.

Detailed Analysis:

1. Classification of Unbranded Mixture of Flour of Pulses and Grams:

The applicant manufactures flour of pulses and grams, which are sold without any brand name and claim exemption. The products sometimes include a minimal amount of cereal/rice flour. The applicant argues that the blending of these flours does not create a commercially distinct product and should still fall under HSN Code 1106 for leguminous flours and HSN Code 1102 for cereal flours, which are exempted from GST as per Notification No. 2/2017-C.T.(Rate) dated 28.06.2017.

The Central Authority, however, contends that blending these flours for preparing savories constitutes "Preparation of flour" and should be classified under HSN 1901, which is taxable at 18%.

2. Clarification of GST Rate for Flour Mixture:

The applicant provided various mixtures of flours with specific ratios and sought clarification on their classification and applicable GST rates. The mixtures include combinations of gram flour, pea flour, maize flour, rice flour, and urad flour in different proportions.

The Authority examined the classification based on the Customs Tariff Act, 1975, and the HSN explanatory notes. It was determined that products obtained from milling cereals and dried leguminous vegetables are classified under Chapter 11 if no further processing or addition of substances occurs. The mixtures provided by the applicant fall under multiple tariff headings, primarily CTH 1102 and CTH 1106.

Classification and GST Rate Determination:

- Type I (80% Gram, 10% Maize, 10% Rice): Classified under CTH 11061090.
- Type II (70% Gram, 10% Peas, 10% Maize, 10% Rice): Classified under CTH 11061090.
- Type III (50% Gram, 20% Peas, 20% Maize, 10% Rice): Classified under CTH 11061090.
- Type IV (70% Peas, 15% Maize, 15% Rice): Classified under CTH 11061090.
- Type V (25% Gram, 25% Peas, 25% Maize, 25% Rice): Classified under CTH 11061090.
- Type VI (95% Rice, 5% Urad): Classified under CTH 11029090.

Applicable GST Rates:

- With Registered Trade Mark:
- Types I-V: 2.5% CGST + 2.5% SGST.
- Type VI: 2.5% CGST + 2.5% SGST.

- Without Registered Brand Name:
- Types I-V: Nil CGST + Nil SGST.
- Type VI: Nil CGST + Nil SGST.

The ruling emphasizes that the classification and GST rate depend on whether the products are sold with or without a registered brand name. The Authority concluded that mixtures of flours without further processing or additives should be classified under Chapter 11, while the specific GST rate depends on branding and packaging.

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