Instant Mix Flours Classified Under 18% GST Rate as Food Preparations Not Otherwise Specified.

The ruling authority classified the applicant's various instant mix flours under HSN 2106, which pertains to "Food preparations not elsewhere specified or included." Consequently, these products are subject to an 18% GST rate, as specified in Notification No. 1/2017-Central Tax (Rate). The authority dismissed previous VAT determinations and emphasized adherence to GST classification based on the Harmonized System of Nomenclature (HSN).

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Issues Involved:

1. Classification of various instant mix flours under the appropriate Harmonized System of Nomenclature (HSN) code.
2. Determination of the applicable Goods and Services Tax (GST) rate for these products.

Detailed Analysis:

1. Classification of Instant Mix Flours:

The primary issue revolves around the classification of various instant mix flours manufactured by the applicant. The applicant argued that these products should be classified under HSN 1102 or alternatively under HSN 1106.

- HSN 1102: This heading covers "Cereal Flours other than that of wheat or meslin." The applicant contended that their products, being primarily flours with added spices, should fall under this category. However, the ruling authority noted that the Explanatory Notes to HSN 1102 allow for the addition of very small quantities of certain substances like mineral phosphates and vitamins, but the addition of spices and other ingredients in significant proportions (ranging from 5% to 37%) as in the applicant's products, intended for use as food preparations, excludes them from this heading.

- HSN 1106: This heading covers "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." The applicant suggested that their products could also be classified under this heading. However, the ruling authority found that the presence of spices and other ingredients in significant proportions, which are not mentioned in the Chapter Heading 1106 or the relevant Explanatory Notes of HSN, disqualifies the products from being classified under this heading.

- HSN 2106: Ultimately, the ruling authority classified the products under HSN 2106, which covers "Food preparations not elsewhere specified or included." The authority reasoned that the products are preparations for use after processing, such as cooking, and are not specified under any other heading. The products are marketed as "Instant Mix Flour" and require further processing before consumption, aligning them with the characteristics of goods covered under HSN 2106.

2. Determination of GST Rate:

Having classified the products under HSN 2106, the next issue was determining the applicable GST rate.

- The ruling authority referred to Notification No. 1/2017-Central Tax (Rate), which specifies the GST rates for various goods. Under this notification, "Food preparations not elsewhere specified or included" falling under Chapter Heading 2106 are subject to an 18% GST rate (9% CGST + 9% SGST), as per entry at Sr. No. 23 of Schedule III.

- The authority clarified that the applicant's products do not fall under any specific exclusions listed in the notification that would attract lower GST rates. Therefore, the applicable GST rate for the applicant's instant mix flours is 18%.

Conclusion:

The ruling concluded that the various instant mix flours manufactured by the applicant, including Gota, Dakor Gota, Methi Gota, Khaman, Dhokla, Idli, Rava Idli, Dosa, Upma, Dahiwada, Dalwada, Menduvada, Handvo, and Khichu, are classifiable under HSN 2106 90 (Others) and attract an 18% GST rate. The authority dismissed the applicability of previous VAT determinations and other case laws cited by the applicant, emphasizing the need to follow GST classification based on the Harmonized System of Nomenclature (HSN) and the associated rules.

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