Flour-based instant mixes classified as food preparations, while bundled snack supplies were treated as mixed supplies.

Flour-based instant mix products containing spices, salt, acidity regulators, raising agents and other added ingredients were held to go beyond the limited additives contemplated for Chapter 11 and to be preparations for human consumption under heading 2106 90, attracting 18% GST. The authority also held that gota or methi gota supplied with chutney or kadhi powder, and khaman supplied with masala pack, were sold for a single price without being naturally bundled in the ordinary course of business, so they constituted mixed supplies rather than composite supplies. The classification and tax treatment adopted below were upheld and the appeal was rejected.

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Issues: (i) Whether the instant mix flour products were classifiable under Chapter 11 of the Customs Tariff Act, 1975 as flours, meal or powder, and therefore taxable at 5% GST, or under Chapter 2106 as food preparations attracting 18% GST; (ii) Whether the supplies of gota or methi gota with chutney or kadhi powder and khaman with masala pack were naturally bundled composite supplies or mixed supplies.

Issue (i): Whether the instant mix flour products were classifiable under Chapter 11 of the Customs Tariff Act, 1975 as flours, meal or powder, and therefore taxable at 5% GST, or under Chapter 2106 as food preparations attracting 18% GST.

Analysis: The products were found to contain flour mixed with spices, salt, acidity regulators, raising agents and other ingredients in proportions going beyond the very small additions contemplated in the HSN explanatory notes for headings 1101, 1102 and 1106. Those headings cover flours of cereals or leguminous vegetables, but exclude flours further processed or mixed with other substances with a view to their use as food preparations. The circular dealing with sattu did not apply because the present products were not limited to very small additives. Applying the tariff headings and the explanatory notes, the products were held to be preparations for human consumption falling under heading 2106, and specifically the residuary entry 2106 90.

Conclusion: The instant mix flour products were not classifiable under Chapter 11 and were correctly classifiable under Chapter 2106, attracting 18% GST.

Issue (ii): Whether the supplies of gota or methi gota with chutney or kadhi powder and khaman with masala pack were naturally bundled composite supplies or mixed supplies.

Analysis: The accompanying chutney, kadhi powder and masala pack were supplied for a single price and were not shown to be naturally bundled in the ordinary course of business. Since the items did not form a composite supply with a principal supply, the bundled supplies were treated as mixed supplies.

Conclusion: The impugned bundled supplies were mixed supplies and not composite supplies.

Final Conclusion: The classification and rate adopted by the lower authority were upheld, and the appeal was rejected.

Ratio Decidendi: Where a flour-based product contains more than very small quantities of added ingredients that make it a preparation for human consumption, it is excluded from Chapter 11 and falls under the residuary food-preparation heading; concomitant items supplied for a single price without natural bundling constitute mixed supplies.

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