Product Classification: Chocolate Milk Powder under Tariff Heading 1806

The Authority classified the product "Chocolate Milk Powder" under Tariff heading 1806 instead of headings 0401 or 0402, based on its composition and characteristics as a blend of Whole Milk Powder and Chocolate Flavoured Powder.

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Issues involved: Classification of "Chocolate Milk Powder" under HSN 0402 or 1806.

Analysis:

Issue 1: Admissibility of the application
The applicant, a cooperative engaged in processing milk products, sought an advance ruling on the classification of their product "Chocolate Milk Powder." The application was admitted as it pertained to issues covered under Section 97(2)(a) of the CGST Act 2017.

Issue 2: Applicant's interpretation of law
The applicant argued that the composition of their product, as per FSSAI and BIS standards, deviates from traditional milk powder specifications after blending with chocolate powder. They contended that the product should be classified under chapter 1806 due to these alterations.

Issue 3: Findings & Discussion
The Authority considered the submissions and examined the nature of the product. It was noted that the product, a blend of Whole Milk Powder and Chocolate Flavoured Powder, did not meet the criteria for classification under headings 0401 or 0402. The product's characteristics aligned more with heading 1806, which covers food preparations containing cocoa.

Conclusion:
The Authority ruled that the "Chocolate Milk Powder" should be classified under Tariff heading 1806 based on the analysis of the product's composition and characteristics.

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