Flavoured Milk Tax Classification Resolved: GST Assessment Orders Overturned, Remanded for Fresh Evaluation Under Correct Tariff Heading

HC disposed of writ petition challenging GST assessment orders. Court ruled flavoured milk falls under tariff heading 0402, not 2202, and directed reconsideration of conversion charges tax rate at 5%. Impugned orders were set aside, matter remanded to Assessing Officer for fresh assessment without costs.

---

---

The Andhra Pradesh High Court, per Justice R. Raghunandan Rao, disposed of the writ petition filed by a GST-registered dealer challenging the assessment order dated 09.03.2021 and the appellate order dated 16.12.2024. The dispute concerned two key issues: (1) classification of flavoured milk under tariff heading CH 2202 versus 0402, and (2) the tax rate applicable on conversion charges from milk to milk powder.Relying on a recent Division Bench decision (W.P.No.254 of 2024), the Court held that flavoured milk falls under tariff heading 0402, not 2202. Regarding conversion charges, the Court noted that in a subsequent appeal for 2019-20, the appellate authority accepted the petitioner's contention that such charges attract tax at 5%, not 18%. The Court set aside both impugned orders and remanded the matter to the Assessing Officer for fresh assessment. The Assessing Officer is directed to classify flavoured milk under tariff heading 0402 and reconsider the taxability and rate on conversion charges in light of the petitioner's submissions. There was no order as to costs.

---