Classification of pre-mix popcorn maize with edible oil and salt under CTH 20081990

The pre-mix popcorn maize (corn kernels) packed with edible oil and salt is classified under CTH 20081990. The applicable tax rate is CGST @6% and SGST @6%, effective from 1st July 2017, as per Notification No. 01/2017-C.T. (Rate). The rate of 12% applies retrospectively from this date.

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Issues Involved:
1. Classification of pre-mix popcorn maize under the appropriate HSN code.
2. Applicable GST rate for pre-mix popcorn maize.
3. Retrospective applicability of the GST rate from 1st July 2017.

Issue-wise Detailed Analysis:

Classification of Pre-mix Popcorn Maize:
The applicant, engaged in processing and packaging maize corn with edible oil and salt, sought to classify their product under HSN Heading 2008, which would attract a GST rate of 12%. They argued that their product, being a mixture of maize corn kernels with oil and salt, should be classified under HSN 2008 as "other edible parts of plants otherwise prepared or preserved." The applicant referenced a similar ruling by the Maharashtra AAR, which classified pre-mix popcorn under HSN 2008.

Upon examination, the Authority noted that the product consists of maize corn kernels with added oil, salt, and flavorings, specifically packed for popcorn vending machines and not for retail sale. The essential character of the product remains that of corn kernels, which are seeds of the maize plant. Under the Customs Tariff Act, Chapter 20 covers preparations of vegetables, fruit, nuts, or other parts of plants not provided for in Chapters 7, 8, or 11. Since the product retains its essential nature as corn kernels, it is classified under CTH 2008.

Applicable GST Rate:
The Authority confirmed that the product falls under CTH 20081990, which pertains to "other edible parts of plants otherwise prepared or preserved." According to Notification No. 01/2017-C.T. (Rate) dated 28.06.2017, the applicable GST rate for products under this heading is CGST @6% and SGST @6%, totaling 12%. This classification and rate have been effective since 1st July 2017 and have not changed.

Retrospective Applicability of GST Rate:
The applicant also sought clarification on whether the GST rate of 12% under HSN 2008 would apply retrospectively from 1st July 2017. The Authority confirmed that the applicable rate of CGST @6% and SGST @6% under CTH 20081990 has been in effect since 1st July 2017. Therefore, the rate of 12% is applicable retrospectively from this date.

Ruling:
1. The pre-mix popcorn maize (corn kernels) packed with edible oil and salt supplied by the applicant is classified under CTH 20081990.
2. The applicable rate of tax is CGST @6% as per SI No 40 of Schedule II of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 and SGST @6% as per Sl.No. 40 of Schedule II of Notification No. II (2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017, effective from 1st July 2017.

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