2021 (8) TMI 784 - AAR - GST

Product 'Laban' Classified as 'Lassi' Exempt from GST under HSN 040390

The Advance Ruling Authority classified the product as Lassi under HSN code 040390, deeming it exempt from GST based on manufacturing process and ... Classification of goods as fermented milk product - Interpretation of Heading 0403 of the HSN - Exemption under Notification No.2/2017-Central Tax (Rate) - Product description versus trade nameClassification of goods as fermented milk product - Product description versus trade name - Interpretation of Heading 0403 of the HSN - Exemption under Notification No.2/2017-Central Tax (Rate) - Product sold as 'Laban' but made and labelled as described is to be classified as Lassi and its tax treatment determined accordingly. - HELD THAT: - The Authority examined the manufacturing process submitted by the applicant and the ingredient declaration on the product bottle, which described the goods as a 'Dairy based fermented Drink' and listed pasteurised toned milk, active culture, spices, flavour and stabilizer. Heading 0403 covers buttermilk, curdled milk and all fermented or acidified milk and cream, whether or not flavoured or containing added sugar, and the Explanatory Notes confirm inclusion of fermented milk drinks. Applying the HSN description and the product composition and manufacturing steps, the goods fall within the scope of Lassi. Sr. No.26 of Notification No.2/2017-Central Tax (Rate) dated 28-6-17 specifically lists Curds; Lassi; Butter milk, bringing the classified product within the exemption entry.Product is classified as Lassi under HSN 040390 and is exempt from GST under the cited notification.Final Conclusion: The Advance Ruling holds that the product marketed as 'Laban', given its composition and manufacture, is Lassi classifiable under HSN 040390 and is exempt from GST under Notification No.2/2017-Central Tax (Rate) dated 28-6-17. Issues Involved:Classification of product as Lassi under Description of Goods; Taxability of goods - exempted or taxable; HSN of the Product and rate of tax on the product if exempted or taxable.Classification of Product as Lassi under Description of Goods:The applicant sought an advance ruling on whether a product named 'Laban' but manufactured as 'Lassi' could be classified as Lassi under the Description of Goods. The Authority examined the manufacturing process and ingredients of the product. They noted that 'Lassi' is a fermented milk drink with specific ingredients. After reviewing the manufacturing process and ingredients of the product named 'Laban,' the Authority concluded that the subject goods were indeed Lassi based on the contents displayed on the bottle.Taxability of Goods - Exempted or Taxable:The second issue raised was whether the goods were taxable or exempted from GST. The Authority referred to the relevant HSN code 0403 which covers buttermilk, curdled milk, yogurt, and other fermented or acidified milk products. After analyzing the manufacturing process and the contents of the product, the Authority determined that the goods fell under the category of Lassi as per Notification No. 2/2017-Central Tax (Rate) dated 28-6-17. Consequently, the Authority ruled that the goods were exempt from GST.HSN of the Product and Rate of Tax:The applicant also sought clarification on the HSN of the product and the rate of tax applicable if the goods were taxable. The Authority, after establishing that the product was classified as Lassi, identified the HSN code as 040390 and confirmed that the product was exempt from GST. Therefore, the ruling provided clarity on the classification of the product, its taxability status, HSN code, and rate of tax, ultimately exempting the product from GST.In conclusion, the Advance Ruling Authority classified the product as Lassi under the HSN code 040390 and deemed it exempt from GST based on the manufacturing process, ingredients, and relevant notifications. The ruling provided a comprehensive analysis of the issues raised by the applicant, ensuring clarity on the classification and taxability of the product named 'Laban' but manufactured as 'Lassi.'