Classification of Flours under HSN 2106 - 18% GST Rate

The Authority ruled that the various types of flours in question are classifiable under HSN 2106 and attract an 18% GST rate. The products were found to be food preparations requiring further processing before consumption, leading to their classification under subheading 21069099. This decision was based on the composition of the products, which contain significant proportions of spices and ingredients not covered under HSN 1106 as argued by the applicant.

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Issues Involved:
Classification and applicable GST rate for various types of flours (Gota Flour, Khaman Flour, Dalwada Flour, Dahiwada Flour, Dhokla Flour, Idli Flour, and Dosa Flour) manufactured and supplied by the applicant.

Detailed Analysis:

1. Classification of Products:
The applicant argued that their products should be classified under HSN 1106, which pertains to "Flour, Meal, and Powder of the dried leguminous vegetables of heading 0713, of sago or of roots or tubers of heading 0714 or of the products of Chapter 8." They contended that their products, being flours mixed with spices, should fall under this category and attract a GST rate of 5% (2.5% CGST + 2.5% SGST).

2. Applicant's Justifications:
The applicant emphasized that their products are not "ready to eat" but "ready to cook," requiring further preparation before consumption. They also referenced previous VAT regime determinations and legal precedents to support their classification under HSN 1106.

3. Revenue's Submission:
The Revenue argued that the application should not be admitted as an enquiry was already initiated against the applicant. However, the Authority found that the enquiry was initiated after the application was filed, thus not barring the ruling.

4. Authority's Findings:
The Authority clarified that classification under GST is based on HSN and the Customs Tariff, which includes specific rules and explanatory notes. The Authority noted that the applicant's products contain significant proportions of spices and other ingredients (ranging from 5% to 27%), which are not covered under Chapter Heading 1106.

5. Examination of Products:
Upon examining the products, the Authority found that they are labeled as "Instant Mix" and contain various spices and ingredients. This composition led the Authority to conclude that these products do not fit under HSN 1106 but rather under HSN 2106, which covers "Food Preparations not elsewhere specified or included."

6. Relevant Circulars and Precedents:
The Authority referenced CBIC Circular No. 80/54/2018-GST, which clarifies that flour with very small amounts of additives can be classified under HSN 1106. However, the Authority found that the applicant's products contain significant additives, distinguishing them from products like "Sattu" or "Chhatua."

7. Final Classification:
The Authority ruled that the applicant's products are appropriately classifiable under HSN 2106, specifically under subheading 21069099, as they are food preparations requiring further processing before consumption.

8. Applicable GST Rate:
As per Notification No. 1/2017-Central Tax (Rate), the products falling under HSN 2106 attract an 18% GST rate (9% CGST + 9% SGST). The Authority noted that none of the applicant's products are excluded from this entry or specifically included in any other entry attracting a different rate.

Ruling:
The products (Gota Flour, Khaman Flour, Dalwada Flour, Dahiwada Flour, Dhokla Flour, Idli Flour, and Dosa Flour) are classifiable under HSN 2106 90 (Others) and attract an 18% GST rate (9% CGST + 9% SGST) as per Sl. No. 23 of Schedule-III to the Notification No. 01/2017-Central Tax (Rate) dated 28-6-2017.

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