2020 (2) TMI 98

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....s Mahalakshmi Store 26/6, Chinthamani Road, Near Keeraithurai Bus Stop, Madurai - 625 001. (hereinafter referred to as 'Applicant') is registered under GST vide GSTIN No. 33AESPD1764Q1ZZ. The Applicant has preferred an application seeking Advance Ruling on the following Question: 1) Whether the unbranded mixture of flour of pulses and grams i.e. leguminous vegetables and cereal flours fall under the HSN Code 1106 and 1102 respectively though blending of leguminous flour added with very small quantity of rice flour or maize flour (without adding salt or any masala product) fall under exemption as per the circular no 80 dt. 31-12-2018? 2) Clarify the GST Rate for Flour Mixture of Grams, pulses, leguminous vegetable with cereal flour/Rice flour and it's HSN Code? The Applicant has submitted the copy of application in Form GST ARA - 01 and submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/-each under Sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they manufacture flour of pulses and gram i.e. leguminous vegetables and cereal flour. Their products are sold without having any brand n....

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....6.2017)". Further the dictionary meaning of (Wikipedia),- "Sattu is flour from the Indian subcontinent consisting of a mixture of ground pulses and cereals. The dry powder is prepared in various ways as a principal or secondary ingredient of dishes." 3.1 The applicant was heard in person on 24.07.2019. The applicant appeared and gave a written submission. They stated that they have been supplying gram flour, peas flour, com flour, rice flour separately. Now, they propose to supply a mixture of these flours. They undertook to submit the ratios in which these flour are going to be sold. They have not yet made any supply for the same. They will submit the specific ratio of each ingredients for which the ruling is sought. 3.2 The Superintendent of CGST & Central Excise, Madurai south Range appeared and filed written submissions of the central jurisdiction authority, the Commissioner of CGST & Central Excise, Madurai. 4. The Central Authority has furnished the following comments: • Unbranded flour of dhall, gram, pulses of dried leguminous vegetables(HSN Code 1106) and unbranded cereal flours(rice flour, maize flour etc)(HSN Code 1102) are figured in th....

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....various proportions given in para 5.1 above. They claim that there would not be emergence of a commercially distinct and separate commodity when different kinds of flour of pulses and grams are mixed with rice flour or maize flour, which continue to be called as flour of pulses and grams. The applicant has sought the eligibility of exemption under the HSN Code 1106 and 1102 as per the circular no. 80 dated 31.12.2018 and the applicable GST Rate and the HSN Code. 7.1 The applicant has claimed exemption on the basis of the circular No.80/54/2018 GST, F.No.354/432/2018-TRU, Govt. India, Ministry of Finance, Department of Revenue (Tax Research Unit), dated 31.12.2018 which clarifies that Chhatu or Sattu, which is a mixture of flour of ground pulses and cereals improved by the addition of very small amounts of additive and continued to be classified under HSN 1106, if sold only as unbranded, attracts Nil GST vide Sl.No.78 of Notification No.2/2017-Central Tax (Rate), dated 28.06.2017 and if branded, attracts 5% GST vide Sl.No.59 of Schedule I of Notification No. 1/2017 -Central Taxes (Rate) dated 28.06.2017. The primary issue to be decided is whether the product of the applicant, a m....

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....s coffee substitutes (heading 09.01 or 21.01). (b) Cereal husks (heading 12.13). (c) Prepared flours, groats, meals or starches of heading 19.01. It is seen from the above that chapter 11 covers products obtained from milling of cereals, dried leguminous vegetables, potatoes, fruits etc. The further classification depends on the raw materials and the fineness of the products .i.e flour vs groats or meals when passed through sieve. It specifically excluded prepared flours of heading 1901. CTH 1102 : 1102   CEREAL FLOURS OTHER THAN THAT OF WHEAT OR MESLIN 1102 20 00 - Maize (corn) flour 1102 90 - Other 1102 90 10 - - - Rye flour 1102 90 90 - - - Other HSN Explanatory notes to CTH 1102 states: 11.02 - Cereal flours other than of wheat or meslin.- 1102.20 - Maize (corn) flour 1102.90 - Other This heading covers flours (i.e., the pulverised products obtained by milling the cereals of Chapter 10) other than flours of wheat or meslin. Products of the milling of rye, barley, oats, maize (corn) (including whole cobs ground with or without their husks) grain sorghum, rice....

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....(heading 12.12). (c) Soups and broths (whether in liquid solid powder with a basis of vegetable flours or meals (heading 21.04) Products of this heading may be improved by the addition of very small amounts of anti-oxidants or emulsifiers. It is seen from above that products obtained from milling of dried leguminous vegetable including peas, lentils are covered under CTH 1106 and by milling of cereals under CTH 1102. The applicant submitted that the product at hand is manufactured by grinding of pulses, mixing of flours, sieving and the finished product is packed. The flour of grams, peas, rice, maize and urad dal are mixed in various proportions and packed. There is no addition of salt, spices etc nor of any further processing of the flours. As seen in the explanatory notes to chapter 11 above, flours of cereals and flours of dried leguminous vegetable and lentils are classified under chapter 11 if they are obtained only by milling of these raw materials and no further processing has taken place and no addition of other substances with a view for their use as food preparations. If that was the case, they would be classified under CTH 1901 and such products are....

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....ly. This gives these products the essential characteristics of flours of dried leguminous vegetables and lentils i.e classified under CTH 11061090. In Type VI, the proportion of rice flour is 95% and hence it has the characteristics of flour of cereal and hence classified under CTH 11029090. In the case of Type V, there is equal proportion of flour of cereals (25 % rice and 25% maize) and dried leguminous vegetable (25% gram and 25% peas). In this case, Rule 3(c) is applicable i.e. When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. Accordingly, Type V product is to be classified under CTH 11061090. 8. Having decided the classification, the applicable rate of tax is dependent on whether the applicant is using a registered brand name which is defined in Notification No. 1/2017-C.T.(Rate) dated 28.06.2017 as the brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is registered under the Trade Marks Act, 1999. It is seen from the packaging that the applicant is p....