Classification Ruling: Un-fried Fryums taxed at 18% GST rate

The authority ruled that the product of different shapes and sizes manufactured and supplied by the applicant is classified as "Un-fried Fryums" under Tariff Item 2106 90 99, not as "Papad." Consequently, the applicable GST rate for such products is 18% (CGST 9% + GGST 9% or IGST 18%).

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Issues Involved:
1. Classification of "Papad" of different shapes and sizes.
2. Applicable rate of SGST and CGST on such "Papad".

Detailed Analysis:

1. Classification of "Papad" of Different Shapes and Sizes:
The applicant, engaged in manufacturing "Papad" of various shapes and sizes, sought to classify their product under Tariff Heading 1905 90 40, which pertains to "Papad, by whatever name it is known, except when served for consumption". The applicant argued that despite the varied shapes and sizes, the core ingredients and preparation method remain consistent with traditional "Papad". They cited several legal precedents and judicial pronouncements to support their claim, emphasizing that technological advancements and market demands have led to innovations in the product's shape and size, but it still qualifies as "Papad".

However, the authority observed that "Papad" is not explicitly defined under the Customs Tariff Act, 1975, CGST Act, 2017, or GGST Act, 2017. The principle of common parlance was applied, where the product's classification should be based on its understanding in common language. The authority referenced multiple judicial decisions, including those from the Hon'ble Supreme Court and CEGAT, which indicated that "Fryums" and similar products are typically classified as "Namkeen" rather than "Papad".

The authority further noted that in commercial parlance, "Papad" and "Fryums" are distinct products. The applicant's own admission that their product is commonly known as "Fryums" in the market reinforced this distinction. Consequently, the authority concluded that "Un-fried Fryums" do not qualify as "Papad" under Tariff Item 1905 90 40 but are more appropriately classified under Tariff Item 2106 90 99, which covers food preparations not elsewhere specified or included.

2. Applicable Rate of SGST and CGST on Such "Papad":
Given the classification under Tariff Item 2106 90 99, the applicable Goods and Services Tax (GST) rate was determined based on Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017, as amended. The relevant entry specifies an 18% GST rate (CGST 9% + GGST 9% or IGST 18%) for food preparations not elsewhere specified or included.

Conclusion:
- The product of different shapes and sizes manufactured and supplied by the applicant is "Un-fried Fryums" and not "Papad".
- The appropriate classification is under Tariff Item 2106 90 99 of the First Schedule to the Customs Tariff Act, 1975.
- The applicable GST rate is 18% (CGST 9% + GGST 9% or IGST 18%).

Ruling:
1. Classification: The product of different shapes and sizes is classified as "Un-fried Fryums" under Tariff Item 2106 90 99.
2. Applicable GST Rate: The applicable rate of SGST and CGST on the supply of such "Un-fried Fryums" is 18% (CGST 9% + GGST 9% or IGST 18%).

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