Flavoured milk classification falls under beverage entry, not milk heading, where tariff notes exclude flavoured milk products.

Flavoured milk sold as "Power Sip" is not classifiable as milk under Heading 0402 because Chapter Note 1 to Chapter 4 confines milk to full cream, partially skimmed or completely skimmed milk, and the HSN explanatory notes exclude milk beverages flavoured with cocoa or other substances from that heading. The product is instead covered by Heading 2202, and specifically Tariff Item 2202 99 30 for beverages containing milk, so the classification must follow the specific beverage entry rather than the general milk entry. Earlier rulings on skimmed milk and milk powder were distinguished on their facts and tariff context.

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Issues: Whether flavoured milk sold under the trade name "Power Sip" is classifiable under Heading 0402 of the Customs Tariff Act, 1975 as milk, or under Tariff Item 2202 99 30 as a beverage containing milk.

Analysis: Classification under GST is to be determined in accordance with the Customs Tariff Act, 1975 and the HSN, including the section notes, chapter notes and explanatory notes. Chapter Note 1 to Chapter 4 defines milk as full cream milk or partially or completely skimmed milk. The relevant HSN explanatory note for Heading 0402 excludes beverages consisting of milk flavoured with cocoa or other substances and places such products under Heading 22.02. On the product material placed on record, the milk constituent was standardized milk in a flavoured form, not full cream or skimmed milk as contemplated by Chapter 4. The tariff structure and the HSN note therefore support exclusion from Heading 0402. Heading 2202 specifically covers other non-alcoholic beverages, and Tariff Item 2202 99 30 expressly covers beverages containing milk. The relied upon precedents on skimmed milk and milk powder were distinguished on facts and tariff context and were held not to govern the present classification question.

Conclusion: Flavoured milk is not classifiable under Heading 0402 and is classifiable under Tariff Item 2202 99 30 as a beverage containing milk.

Ratio Decidendi: Where the tariff entry for milk is confined by chapter note to full cream or skimmed milk, and the HSN explanatory notes expressly exclude flavoured milk beverages from that chapter, the product must be classified under the specific beverage entry covering beverages containing milk.

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