Ready-to-drink Jigarthanda classified as beverage under HSN 2202 99 30, attracts 12% GST per Section 2(52)

AAR Tamil Nadu held that ready-to-drink Jigarthanda in unit containers constitutes goods under CGST Act Section 2(52) as movable property. The product was classified under HSN 2202 99 30 as beverages containing milk, not under HSN 0402 as claimed by applicant. Since milk flavoured with substances is specifically excluded from Chapter 0402 and included under Chapter 2202, classification follows the product's market form. Jigarthanda attracts 12% GST (6% CGST + 6% SGST for intra-state; 12% IGST for inter-state supply) under taxable beverages containing milk category.

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Issues Involved:
1. Classification of the product "Jigarthanda" under the description of goods.
2. Taxability or exemption status of "Jigarthanda".
3. HSN code and rate of tax if the product is exempted.
4. HSN code and rate of tax if the product is taxable.

Issue-wise Detailed Analysis:

1. Classification of the product "Jigarthanda" under the description of goods:

The applicant manufactures a product named "Jigarthanda" using pasteurized milk, milk cream, badam pisin, sugar, and nannari syrup. The manufacturing process involves pasteurization, preparation of sugar syrup, collection of milk cream, and mixing of all ingredients to form a semi-solid product. The key question is whether this product can be classified under HSN 0402 or any other category.

The judgment states that "Jigarthanda" is classified as "goods" under Section 2(52) of the CGST Act, 2017, which defines goods as "every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply."

2. Taxability or exemption status of "Jigarthanda":

The ruling clarifies that "Jigarthanda" is taxable. The applicant's claim that the product falls under HSN 0402 (Milk and Cream, concentrated or containing added sugar or other sweetening matter) was rejected. Instead, it is classified under HSN 2202 99 30, which covers "Beverages containing milk."

3. HSN code and rate of tax if the product is exempted:

The product "Jigarthanda" is not exempted. The ruling explicitly states that it does not find a place in Schedule III of the CGST Act, 2017, as non-supply nor is it exempted under Notification No.2/2017 CTR dated 28.06.2017.

4. HSN code and rate of tax if the product is taxable:

The product is classified under HSN 2202 99 30 as "Beverages containing milk." The applicable tax rates are as follows:
- CGST @ 6%
- SGST @ 6% for intra-state supply, as per Notification No.1/2017 CTR dated 28.06.2017 vide serial No.50 of Schedule II and G.O. (Ms.) No. 62 dated 29.06.2017.
- IGST @ 12% for inter-state supply, as per Notification No.1/2017 Integrated Tax (Rate) dated 28.06.2017.

Ruling:

1. Classification: "Jigarthanda" manufactured by the applicant is covered under the description of goods.
2. Taxability: "Jigarthanda" is taxable.
3. Exemption Status: "Jigarthanda" is not exempted.
4. HSN and Tax Rate: "Jigarthanda" is classified under HSN 2202 99 30, attracting CGST @ 6%, SGST @ 6% for intra-state supply, and IGST @ 12% for inter-state supply.

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