Flour-based instant mix products with substantial additives are classifiable as food preparations under Chapter 21 and taxed at the general GST rate.

Flour-based instant mix products containing substantial spices, condiments, preservatives and other additives, and marketed as preparations for making dishes, fall outside Chapter 11 because that chapter covers flour only where additions are limited to small permitted quantities. They are therefore classifiable as food preparations not elsewhere specified or included under Tariff Item 2106 90 99 in Chapter 21. Once so classified, they attract GST at the general rate under the relevant Schedule III entry, and the fact that further cooking is required does not change that classification or rate.

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Issues: (i) Whether the 17 instant mix or ready mix flour products were classifiable under Tariff Item 2106 90 99 of the First Schedule to the Customs Tariff Act, 1975. (ii) Whether those products were leviable to GST at 18% under Entry No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and the corresponding State notification.

Issue (i): Whether the 17 instant mix or ready mix flour products were classifiable under Tariff Item 2106 90 99 of the First Schedule to the Customs Tariff Act, 1975.

Analysis: The products were found to consist not merely of flour from cereals or leguminous vegetables, but also of spices, condiments, preservatives and other additives in significant proportions, and were marketed and used as preparations for making dishes for human consumption. On the basis of the HSN Explanatory Notes, products of Chapter 11 remain in that chapter only where the additions are limited to very small quantities of permitted substances to improve or enrich the flour. The mixtures in question were held to fall outside Chapter 11 because the added ingredients were not of that limited character and were included with a view to their use as food preparations. The products were therefore treated as food preparations not elsewhere specified or included, falling under the residuary tariff item in Chapter 21.

Conclusion: Yes. The 17 products were classifiable under Tariff Item 2106 90 99.

Issue (ii): Whether those products were leviable to GST at 18% under Entry No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and the corresponding State notification.

Analysis: Once the products were held to fall under Chapter Heading 21.06, they attracted the general rate under Entry No. 23 of Schedule III. None of the products fell within the excluded categories specifically carved out from that entry or within any other more specific concessional entry. The fact that the products required cooking or further preparation before consumption did not take them out of Chapter 21, because the entry is directed to food preparations and is not confined to ready-to-eat goods.

Conclusion: Yes. The products were leviable to GST at 18% under the relevant Schedule III entry.

Final Conclusion: The advance ruling was modified, and the instant mix flour products were held to be food preparations under Chapter 21 attracting the general GST rate applicable to that entry.

Ratio Decidendi: Where flour-based mixtures contain substantial non-permitted additives and are prepared for use as food preparations, they cease to be classifiable under Chapter 11 and are instead classifiable under Chapter 21 as food preparations not elsewhere specified or included.

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