TaxTMI 
TaxTMI 
TaxTMI 
2020 (5) TMI 214
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....Industrial Estate, Chennai, TamilNadu-600 058. (hereinafter called the Applicant) are registered under GST with GSTIN. 33AABCS2066P1ZM. The applicant is a leading supplier of dairy products, biscuits, breads, etc. which are available across the country in close to 5 million retail outlets. The applicant has sought Advance Ruling on: Whether UHT Sterilized Flavoured Milk is classifiable under Chapter 4 (Tariff Heading 0402 which covers 'Milk... containing added sugar or other sweetening matter...' or alternatively, Tariff Heading 0404 which covers 'Other', i.e. 'products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included') The Applicant has submitted the copy of application in Form GST ARA - 01 and also 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 / procure and supply UHT Sterilized Flavoured Milk and market it under the brand name 'Britannia Winkin' Cow Thick Shake' (hereinafter 'the product'). The product is made in multiple ....
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....r additives allow for effective packing and shelf-life. These additions do not in any manner change the essential nature of the product, i.e. milk. The product is marketed under the brand name Winkin' Cow thick shake' to make it more attractive to consumers. It is pertinent to mention here that the product is targeted towards children, and hence, the packaging, labelling and marketing of the product as a fun, colourful and tasty drink is essential. At the same time, it is as imperative that the drink holds the necessary nutrition to ensure that it is chosen by purchasers (adults) as a preferred choice for consumption. The Applicant has submitted that the essential nature and character of the product under consideration is milk. They relied upon the decision of the Hon'ble High Court in Gujarat Coop. Milk Marketing Federation Ltd. vs. State of U.P. [(2017 (5) GSTL 351 (All.)] = 2017 (6) TMI 91 - ALLAHABAD HIGH COURT. 2.3 The applicant has relied on the position and treatment adopted by the Food Safety and Standards Authority of India, the regulator for the Food sector, and has stated inter-alia, as follows: * The Food Safety and Standards (Food Products Standards and Food Additiv....
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....4 and Chapter 22, then as per the General Rules, the most specific description shall be preferred over general description. The product is commonly known and understood as 'flavoured milk', as it is essentially a form of milk rather than a derivative of milk or milk product. Therefore, the entry most specifically applicable is under Chapter 4. * Rule 3 (b) of the General Rules [which is applicable in the event that classification cannot be determined under Rule 3 (a)] inter alia states that mixture and composite goods consisting of different materials shall be classified as if they consist of the material or component which gives them their essential character. In the present case, since milk constitutes the major ingredient and provides the essential character to the flavoured milk, the product merits classification as milk under Chapter 4. * Further, the general explanatory notes for Chapter 4 under the Harmonized Commodity Description and Coding System permits addition of certain other ingredients which could either work as stabilizers, sweeteners or flavouring agents. Therefore, flavoured milk is classifiable under Chapter 4 even if they contain any of the aforementioned ad....
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....is most appropriately classifiable under Chapter 4, specifically Tariff Entry 0402 99 90, or alternatively, Tariff Entry 0404 90 00. 3.1 The applicant was extended an opportunity to be heard in person on 26.09.2019. The representatives of the applicant company appeared. They gave a written submission and stated that the product Winkin' Cow' is flavoured milk which has 80% and more milk along with flavour, sugar and stabilizers. They submitted that the products should be classified under 0402 or 04049000. The product has milk, solids also. They submitted various judgements under VAT and Central Excise where such products were classified under 0404/02. They submitted copies of invoices. They undertook to submit detailed manufacturing processes and ingredients list with proportion, copies of FSSAI certification for food addition, labelling etc in two weeks time. 3.2 The applicant submitted the Flow Chart of manufacturing process of Britannia UHT Winkin Cow Milk Shake which is reproduced below: Flow Chart * Britannia UHT Winkin Cow Milk Shake Images They also filed Step by Step formulation (approximate quantities in KG) which is produced below: Step by Step Formulation (Approxim....
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....the packs. Certificate of FSSAI issued to Schreiber Dynamix Dairies Private Limited, Mumbai who manufactures Milk products was also submitted. 4. The applicant is under the administrative control of Central Tax. The said jurisdictional authority was addressed to report if there are any pending proceedings in the applicant's case on the issues raised by the applicant in the ARA application and for comments on the issues raised. The said authority did not furnish any report and also has not furnished any comments. Hence, it is construed that there is no proceedings pending in the case of the applicant on the questions seeking Advance ruling before us. 5. The State Jurisdictional Officer vide their letter R.C. No.236979/2019/B3 dated 24.09.2019 submitted that there are no proceedings are pending in the case of the applicant on the issue raised by them in the ARA application. 6.1 We have considered the submissions made by the applicant carefully. The applicants manufacture/procure and supply UHT Sterilised Flavoured Milk and market it under the brand name Britannia Winkin' Cow Thick Shake'. The product is made in multiple flavours -strawberry(strawbericious), Mango(mangolicious), V....
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.... forms, of a fat content, by weight not exceeding 1.5% : 04021010 --- Skimmed Milk 04021020 --- Milk food for babies 04021090 --- Other - In powder, granules or other solid forms, of a fat content, by weight not exceeding 1.5% : 04022100 -- Not containing added sugar or other sweetening matter 040229 -- Other : 04022910 --- Whole milk Whole milk 04022920 --- Milk for babies Milk for babies 04022990 --- Other - Other : 040291 -- Not containing added sugar or other sweetening matter : 04029110 --- Condensed milk 04029190 --- Other 040299 -- Other : 04029910 --- Whole milk 04029920 --- Condensed milk 04029990 --- Other 0404 WHEY, WHETHER OR NOT CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER; PRODUCTS CONSISTING OF NATURAL MILK CONSTITUENTS, WHETHER OR NOT CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER , NOT ELSEWHERE SPECIFIED OR INCLUDEDWHEY, WHETHER OR NOT CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER; PRODUCTS CONSISTING OF NATURAL MILK CONSTITUENTS, WHETHER OR NOT CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER , NOT ELSEWHERE SPECIFIED OR INCLUDED 040410 - ....
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....ed whey (sec Subheading Note 1 to this Chapter). These products may be in liquid, paste or solid (including frozen) form, and may be concentrated (e.g. in powder) or preserved. The heading also covers fresh or preserved products consisting of milk constituents, which do not have the same composition as the natural product. provided they are not more specifically covered elsewhere. Thus the heading includes products which lack one or more natural milk constituents, milk to which natural milk constituents have been added (to obtain, for example. a protein-rich product). Apart from natural milk constituents and the additives mentioned in the General Explanatory Note to this Chapter, the products of this heading may also contain added sugar or other sweetening matter. The powdered products of this heading, particularly whey, may contain small quantities of added lactic ferments, with a view to their use in prepared meat products or as additives for animal feed. The heading does not raver : (a) Skimmed milk or reconstituted milk having the same qualitative and quantitative composition as natural milk (heading 04.01 or 04.82). (b) Whey cheese (heading 04.06). (c) Products o....
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....he applicability of CTH 2202 99 30 to the product is examined as under. The CTH 2202 99 is given as under: 2202 WATERS, INCLUDING MINERAL WATERS AND AERATED WATERS, CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER OR FLAVOURED, AND OTHER NON-ALCOHOLIC BEVERAGES, NOT INCLUDING FRUIT OR VEGETABLE JUICES OF HEADING 2009 22021090 --- Other - Other: 22029100 -- Non alcoholic beer 220299 -- Other : 22029910 --- Soya milk drinks, whether or not sweetended or flavoured 22029920 --- Fruit pulp or fruit juice based drinks 22029930 --- Beverages containing milk 22029990 --- Other The relevant Explanatory notes as per HSN is as below: 2202 WATERS, INCLUDING MINERAL WATERS AND AERATED WATERS, CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER OR FLAVOURED, AND OTHER NON-ALCOHOLIC BEVERAGES, NOT INCLUDING FRUIT OR VEGETABLE JUICES OF HEADING 2009 2202.10 - WATERS, INCLUDING MINERAL WATERS AND AERATED WATERS, CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER OR FLAVOURED, - Other: 2202 91 -- Non alcoholic beer 2202.99 -- Other : This heading, covers non-alcoholic beverages, as defined in Note 3 to this Chapter, no....
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....er Note. CTH 22029930 specifically covers 'Beverages containing milk' and the explanation notes clarifies that those beverages with a basis of milk are covered under this CTH. Rule 2 and other rules of Interpretation are to be applied only when the goods are classifiable under more than one heading and cannot be classified on application of Rule 1 of GIR above. In the case at hand there is a specific heading for the product and therefore we find no necessity to traverse further and apply the other rules and reject the claim of the applicant. 6.7 We find that the applicant has relied on various decisions from different judicial fora and has claimed that the addition of flavor do not change the characteristics of the product and the product still remains milk and therefore classifiable under CTH 04. We do not disagree with the fact that the product in hand is a form of milk but as brought out supra, the product being a ready for consumption drink, i.e. a beverage with a basis of milk, is specifically classified under CTH 22029930 and excluded from the chapter 04. Further, the decisions in the cases relied upon on the classification, the same is based on the tariff existed before ali....