Prepared food classification governs Fortified Rice Kernels, which fall under Chapter 19 and attract GST at 18%.

Fortified Rice Kernels made from rice flour blended with vitamins and minerals and then extruded into pellets were held classifiable under Customs Tariff subheading 19049000, not under Chapter 11. The ruling reasoned that this process produces a prepared food product from cereals, rather than a mere milling product, and fits Chapter 19, which covers prepared foods obtained from cereals or cereal products otherwise prepared. As a result, the applicable GST rate was the rate prescribed for goods under heading 1904, namely 18%.

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Issues: Whether Fortified Rice Kernels (FRK), proposed to be manufactured from rice flour blended with vitamins and minerals and then extruded into pellets, are classifiable under Chapter subheading 19049000 of the Customs Tariff and, if so, what GST rate applies to their supply.

Analysis: The classification of goods under GST is governed by the Customs Tariff framework, including the relevant chapter notes and explanatory notes. Chapter 11 covers products of the milling industry, but the process described for FRK goes beyond mere milling: rice is converted into flour, blended with vitamins and minerals, and then extruded into a reconstituted pellet form. The resulting product is therefore a prepared food product and not a simple cereal flour product of Chapter 11. The scheme of Chapter 19, particularly heading 1904, covers prepared foods obtained from cereals or cereal products that are otherwise prepared. The policy materials relied upon in the ruling also support treatment of fortified rice kernel as falling under Chapter 19. Once classified under heading 1904, the applicable rate is determined by the GST rate notification prescribing tax on goods of that heading.

Conclusion: FRK is classifiable under tariff subheading 19049000 and attracts GST at 18%.

Final Conclusion: The applicant's proposed classification under Chapter 1103 was not accepted, and the product was held to fall under Chapter 19 with the corresponding GST rate applicable to that heading.

Ratio Decidendi: A product obtained by converting cereal into flour, blending it with micronutrients, and extruding it into reconstituted pellets is a prepared food product classifiable under Chapter 19, not a mere product of milling under Chapter 11.

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