TaxTMI 
TaxTMI 
2021 (1) TMI 693
X X X X Extracts X X X X
X X X X Extracts X X X X
....usiness of manufacturing and selling of varied types of mixed flour under the 'Talod' brand name that are used to prepare instant Farsan and other similar dishes; that ready to mix/instant mix is a flour of grains and pulses mixed with spices and condiments, that recipe for preparing farsan/eatables is printed on the packet of product and by following the direction of recipe, farsan/eatables can be prepared instantly after adding such other ingredients as required. The process followed by Talod can be understood as under: (a) Talod purchases food grains and pulses from open market. (b) Such pulses are sorted and washed and then send to grinding machine. (c) Pulses are grinded into flour in grinding machine for e.g. where Grams is purchased it results into gram flour by following grinding process. In certain cases, Talod purchases grinded flour directly from the vendors. (d) Now, certain spices are mixed in flour and such mixed flour is packed in various packings. (e) Mixed flour (commercially known as 'Instant Mix Flour') are sold in open market or through distributors to consumers. (f) End consumer of such instant mix flour is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... salt, Citric acid, Sodium bi carbonate, Turmeric. 2. Gota Mix Flour Grams flour, Sugar, Iodised salt, Chilli powder, Garam masala (powder of chilli cloves, Baciliyam, Black pepper, Coriander, Tej patta (Clove Leaves), Sodium bi-carbonate, Citric acid, Asafoetida, Ajma, Sounff, Chutney powder contacts, Wood apple powder from (Limonia Acidissima). 3. Dhokla Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric acid, Asafoetida. 4. Handwa Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric acid, Turmeric, Chillies, Garam masala (powder at curry leaves Bundian, Fennel seeds, Black peppers, Tajpatta, Clove leaves). 5. Idli Mix Flour Rice, Udad dal, Iodised salt, Sodium Bicarbonate, Citric acid. 6. Dosa Mix Flour Rice, Udad dal, Iodised salt, Sodium Bicarbonate, Citric acid. 7. Dahi-wada Mix Flour Moong dal, Udad dal, Iodised salt, Sodium Bicarbonate, Citric acid. 8. Dalwada Mix Flour Moong dal, Udad dal, Iodised salt, Sodium Bicarbonate, Citric acid. 9. Khichu Mix Flour Paddy & Sago (in powder form), Iodised salt, Cumin seeds, Carbonate of Soda. 10.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....office thinks fit." (4) Chutney powder when supplied with Gota Mix flour and Bhajiya Mix flour, should be considered as Composite Supply having HSN of principal supply i.e. 1106 and 5% GST should apply. 6. The applicant has referred to Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 as well as to explanations (iii) and (iv) of the said notification which provides tax rates on intra-state supplies of goods. The applicant has described the relevant entries related to mixed flour products appearing in Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 as under: Sr.No. Chapter/Heading/Sub-Heading/Tariff item Description of Goods CGST Rate 59. 1106 Meal and powder of the dried leguminous vegetables of heading 0713 (pulses) [other than guar meal 1106 10 10 and guar gum refined split 1106 10 90], of sago or of roots or tubers of heading 0714 or of the products of Chapter 8, put up in unit container and,- (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or any ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sing the said mixed flour is also described on packet itself. In nutshell, for preparing Indian dishes, one has to carry out process prescribed on food packet. Further, significant process is required to be carried out on mixed flour to prepare final Indian dish. • As the description stated in heading 1106 suits for the said products i.e.instant mixed flour; there is no need to go under residual entry. 7.2 The applicant submitted that as per the legal provisions of erstwhile VAT Law, no VAT was payable on the cereal or pulse flour. They have reproduced the entry for classification in VAT schedule as under: SCHEDULE-I (See: Sub-section (1) of section 5) GOODS, THE SALES OR PURCHASE OF WHICH ARE EXEMPT FROM TAX Sr.No. Description of Goods Conditions & exemptions 12. i. Cereals and pulses. ii. Flour of cereals and pulses except Maize Flour. iii. Wheat flour, Rava, Suzi or maida made from wheat. 7.3 The applicant has also referred to different orders determined under VAT regime in relation to classification of cereal or pulse flour which are discussed hereunder: (a) In the case of KITCHEN EXPRESS OVERSEAS LTD.-SANTEJ, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....relied on Tax determination orders passed under VAT Act.) • The said instant mixed flour is prepared from the flour of cereal and pulse only. • The said products are related to milling industry. • Followed legacy of classifying the products as 'mixed flour' as applied in VAT regime (relied on Tax determination orders passed under VAT Act.) 2. Gota Mix Flour 3. Dhokla Mix Flour 4. Handwa Mix Flour 5. Idli Mix Flour 6. Dosa Mix Flour 7. Dahi-wada Mix Flour 8. Dalwada Mix Flour 9. Khichu Mix Flour 10. Upma Mix Flour 11. Rava Idli Mix Flour 12. Medu-vada Mix Flour 13. Muthiya Mix Flour 14. Pudla Mix Flour 15. Moong Bhajiya Mix Flour 16. Cholafali Mix Flour 17. Bhajiya Mix Flour Further, applicant also supplies chutney powder on which applicant is paying GST @5% as mentioned in Sr.No.100A under HSN 2106 as under: Sr.No. HSN Description Ingredients 100A 2106 Chutney Powder Wood apple powder, Sugar, Iodised salt, Chilli powder, Coriander Cumin Powder. 7.5 The applicant has submitted that he provides chutney....
X X X X Extracts X X X X
X X X X Extracts X X X X
....powder of the dried leguminous vegetables of heading 0713 (pulses) [other than guar meal 1106 10 10 and guar gum refined split 1106 10 90], of sago or of roots or tubers of heading 0714 or of the products of Chapter 8, put up in unit container and,- (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone 5% 25 0713 Dried leguminous vegetables, shelled, whether or not skinned or split put up in unit container and,- (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone 5% 13 1901 Malt extract, food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40% by weight of cocoa calculated on a totally defatted basis, not elsewhere spec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. The applicant has submitted the summary of the understanding of the GST rates and applicability of HSN codes of their products as under: Sr.No. Product HSN GST Rate 1. Khaman Mix Flour 1106 5% 2. Gota Mix Flour 1106 5% 3. Dhokla Mix Flour 1106 5% 4. Handwa Mix Flour 1106 5% 5. Idli Mix Flour 1106 5% 6. Dosa Mix Flour 1106 5% 7. Dahi-wada Mix Flour 1106 5% 8. Dalwada Mix Flour 1106 5% 9. Khichu Mix Flour 1106 5% 10. Upma Mix Flour 1106 5% 11. Rava Idli Mix Flour 1106 5% 12. Medu-vada Mix Flour 1106 5% 13. Muthiya Mix Flour 1106 5% 14. Pudla Mix Flour 1106 5% 15. Moong Bhajiya Mix Flour 1106 5% 16. Cholafali Mix Flour 1106 5% 17. Bhajiya Mix Flour 1106 5% 18. Chutney Powder 2106 5% 8.5 The applicant has given additional submission through email dated 20.07.2020 vide which they have submitted photocopies of the invoices showing purchase of the pulses made by them such as Moong mogar, moong kora, urad gota, gramdal kori etc.. Also vide additional submissio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0% 10% 16. Muthiya Mix Flour 0% 90% 90% 90% 10% 17. Khichu Mix Flour 0% 95% 2% 97% 97% 3% Sr.No. Product Wood Apple powder Spices Total 18. Chutney Powder 90% 10% 100% DISCUSSION & FINDINGS: 9. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative Shri Amish Khandhar, Chartered Accountant, at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 10. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act. 11. As per the submission of the applicant, they are in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d. 13. Muthiya Mix Flour Wheat flour, Iodised salt, Citric acid, Red chilli, Asafoetida, Cumin seeds, Ajwain, Sugar, Turmeric, Garam masala. 14. Pudla Mix Flour Gram flour, Iodised salt, Red chilli powder, Asafoetida, Coriander cumin powder, Turmeric. 15. Moong Bhajiya Mix Flour Moong dal, Udad dal, Iodised salt, Citric acid, Sodium bi-carbonate, Red chilli, Saunf, Asafoetida. 16. Chorafali Mix Flour Chana dal, Udad dal, Chola dal, Iodised salt, Chillies, Black salt. 17. Bhajiya Mix Flour Bengal gram flour, Sugar, Iodised salt, Citric acid, Ajwain, Mari, Sodium bi-carbonate, Asafoetida, Coriander seeds. 18. Chutney Powder Wood Apple Powder, Sugar, Iodised Salt, Chilli Powder, Coriander cumin powder. 11.1 Percentage-wise break-up of the flours and other ingredients has been given by the applicant as under: Sr.No. Product Dried leguminous vegetable flours Rice and wheat flours Total flours Spices and other ingredients Chana Dal flour Udad dal flour Moong/Math Dal flour Total of leguminous flours Soji flour (wheat granules) Rice flour Wheat flour Sabu Danaflour ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 (wherein GST rate is 5%) and chutney powder is classified under heading 2106 falling at Sr.No.100A of Schedule-I of the above notification wherein GST rate is 5%. However, on going through the break-up (percentage-wise) of the flours involved in the above products, it is seen that there are a few products, in which the content of rice flour, wheat flour, wheat granules is very high and thereby falling under either of headings 1101, 1102 or 1103 instead of heading 1106. Hence all these sub-headings alongwith their chapter notes as well as explanatory notes to HSN will have to be looked into. In order to determine the classification of the above 18 items, we will be first required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 containing the headings, sub-headings as well as the rates of Central Tax GST applicable to various goods, which are covered under 6 schedules, as under: (i) 2.5 per cent. in respect of goods specified in Schedule I, (ii) 6 per cent. in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s coffee substitutes (heading 0901 or 2101); (b) prepared flours, groats, meals or starches of heading 1901; (c) corn flakes or other products of heading 1904; (d) vegetables, prepared or preserved, of heading 2001, 2004 or 2005; (e) pharmaceutical products (Chapter 30); or (f) starches having the character of perfumery, cosmetic or toilet preparations (Chapter33). 2. (A) Products from the milling of the cereals listed in the table below fall in this Chapter if they have,by weight on the dry product : (a) a starch content (determined by the modified Ewers polarimetric method) exceeding that indicated in column (2); and (b) an ash content (after deduction of any added minerals) not exceeding that indicated in column (3). Otherwise, they fall in heading 2302. However, germ of cereals, whole, rolled, flaked or ground, is always classified in heading 1104. (B) Products falling in this Chapter under the above provisions shall be classified in heading 1101 or 1102 if the percentage passing through a woven metal wire cloth sieve with the aperture indicated in column (4) or (5) is not less, by weight,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or (2) above. This Chapter excludes, inter alia : (a) roasted malt put up as 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; (d Tapioca(heading 19.03). (e) Puffed rice, corn flakes and the like, obtained by swelling or roasting and bulgar wheat in the form of worked grains(heading 19.04) (f) vegetables, prepared or preserved, of heading 20.01, 20.04 or 20.05; (g) Residues derived from the sifting, milling or other working of cereals or of leguminous plants (heading 23.02). (h) pharmaceutical products (Chapter 30). (ij) Products of Chapter 33(see notes 3 and 4 to Chapter 33). 12.4 Explanatory notes to HSN in respect of heading 11.01, 11.02, 11.03 and 11.06 read, as under: 11.01 Wheat or meslin flour. This heading covers wheat or meslin flour (i.e. the pulverised products obtained by milling the cereals of heading 10.01) which fulfil the requirements as to starch content and ash content set out in paragraph (A) of Chapter Note 2(see General Explanatory Note) and comply with the cri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ours mixed with cocoa (heading 18.06 if they contain 40% or more by weight of cocoa calculated on a totally defatted basis, or heading 19.01, if less). 11.03 Cereal groats, meal and pellets: The cereal groats and meals of this heading are products, obtained by the fragmentation of cereal grains(including whole maize(corn) cobs ground with or without their husks), which, where appropriate, fulfil the requirements as to starch and ash content laid down in Chapter Note 2(A) and which in all cases comply with the relevant criterion as to passage through a sieve laid down in Chapter Note 3. As regards the distinction to be made between the flours of heading 11.01 or 11.02, the groats and meals of this heading and the products of heading 1104, see the General Explanatory note to Chapter (Item 1, second paragraph). Cereal groats are small fragments or floury kernels obtained by the rough grinding of grains. Meal is a more granular product than flour and is obtained either from the first sifting after the initial milling operation, or by re-grinding and re-sifting the groats resulting from that initial milling. Durum wheat meal or, semolina, is the principal raw material ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... vegetables falling under 0713). Such flour improved by the addition of very small amounts of additives continues to be classified under HSN code 1106. If unbranded, it attracts Nil GST (S. No. 78 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017) and if branded and packed it attracts 5% GST (S. No. 59 of schedule I of notification No. 1/2017-Central Taxes (Rate) dated 28.06.2017)." Further the dictionary meaning of Sattu is as under: "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." Thus, it can be seen from the above that HSN code1106 includes the flour, meal and powder made from peas, beans or lentils (dried leguminous vegetables falling under 0713) and such flour improved by the addition of very small amounts of additives continues to be classified under HSN code 1106. 12.6 It is seen that products obtained from milling of dried leguminous vegetable including peas, lentils are covered under heading 11.06 and by milling of cereals (in the instant case) fall under headings 11.01, 11.02 or 1103. The applicant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as the criterion is applicable. (c) 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." 13. On going through the percentage-wise break of the flours of the ingredients involved in the products (bearing brand name 'Talod') manufactured by the applicant at para 11.1 above, it is found that in respect of the products mentioned at Sr.Nos.1, 2, 4, 7, 8, 9, 10, 11, 12 and 13 of the list, we find that the flour content of leguminous flour is more in these products. Details of the same are, as under: (a) Khaman mix flour at Sr.No.1 containing 66% leguminous flour and 34% spices and other ingredients. (b) Gota mix flour at Sr.No.2 containing 75% leguminous floor and 25% spices and other ingredients. (c) Handwa mix flour at Sr.No.4 containing 50% leguminous floor, 35% rice flour and 15% of spices and other ingredients. (d) Dahi wada mix flour at Sr.No.7 containing 94% leguminous....
X X X X Extracts X X X X
X X X X Extracts X X X X
....regone. 13.1 As regards the branded products mentioned at Sr.Nos.3, 5 and 6 of the list containing percentage-wise break of the flours of the ingredients involved in the products manufactured by the applicant mentioned at para 11.1 above, we find that the flour content of leguminous flour and rice flour is equal in these products. Details of the same are, as under: (a) Dhokla mix flour at Sr.No.3 containing 45% leguminous flour, 45% of rice flour and 10% spices and other ingredients. (b) Idli mix flour at Sr.No.5 containing 45% leguminous flour, 45% of rice flour and 10% spices and other ingredients. (c) Dosa mix flour at Sr.No.6 containing 45% leguminous flour, 45% of rice flour and 10% spices and other ingredients. In this case, Rule 3(c) is applicable i.e. when goods cannot be classified by reference to Rule 3(a) or 3(b) of the Rules of interpretation of the Customs Tariff, they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. Rice flour is classifiable under heading 1102 whereas leguminous flour is classifiable under heading 1106 and specific sub-heading 11061000. Hence the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er to be classified under the said headings, otherwise they fall under heading 2302. Chapter notes of Chapter 11 reads as under: (A) Products from the milling of the cereals listed in the table below fall in this Chapter if they have, by weight on the dry product : (a) a starch content (determined by the modified Ewers polarimetric method) exceeding that indicated in column (2); and (b) an ash content (after deduction of any added minerals) not exceeding that indicated in column (3). Otherwise, they fall in heading 2302. However, germ of cereals, whole, rolled, flaked or ground, is always classified in heading 1104. (B) Products falling in this Chapter under the above provisions shall be classified in heading 1101 or 1102 if the percentage passing through a woven metal wire cloth sieve with the aperture indicated in column (4) or (5) is not less, by weight, than that shown against the cereal concerned. Otherwise, they fall in heading 1103 or 1104. Cereal Starch content Ash content Rate of passage through a sieve with an aperture of 315 micrometers (microns) 500 micrometers (microns) (1) (2) (3) (4)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Tax(Rate) dated 28.06.2017(hereinafter referred to as the said notification), we find that the same appears at entry No.103A of Schedule-I of the said Notification(after amendment of the said notification vide Corrigendum No.2 dated 12.07.2017 vide which entry No.103A was inserted) on which GST payable is 5% (2.5% CGST + 2.5% SGST) which reads as under: S.No. Chapter/Heading/Sub-heading / Tariff item Description of goods 103A 2302 Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants [other than aquatic feed including shrimp feed and prawn feed, poultry feed and cattle feed, including grass, hay and straw, supplement and husk of pulses, concentrates and additives, wheat bran and de-oiled cake]"; 13.6 As regards the branded product mentioned at Sr.No.18 at para 11.1 above, i.e. Chutney powder, the applicant has given the percentage-wise break-up as 90% wood apple powder and 10% spices. Further, chutney powder being a food preparation (as chutney can be prepared instantly by simply adding/mixing water to it and stirring) is classifiable under heading 2106 of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Further, vide the aforementioned notification, chutney powder was excluded from the above entry and Sr.100A of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 was amended with effect from 15.11.2017 wherein idli/dosa batter and chutney powder was added to roasted gram wherein GST rate involved was 5%(2.5% CGST + 2.5% SGST). The same reads as under: S.No. Chapter/Heading/ Subheading / Tariff item Description of goods 100A 2106 Roasted gram, idli/dosa batter, chutney powder 13.8 In view of the above, we conclude that chutney powder is classifiable under Sub-heading 21069099 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) on which GST rate was 18%(9% CGST + 9% SGST) upto 14.11.2017 and 5%(2.5% CGST + 2.5% SGST)with effect from 15.11.2017. 14. Next issue required to be decided is whether chutney powder when supplied with Gota mix flour and Bhajiya mix flour, should be considered as Composite supply as stated by the applicant. For this we need to refer to Section 2(30) of the CGST Act, 2017, which reads as under: "composite supply" means a supply made by a taxable person to a recipient consisting of two or mo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately;" The applicant has submitted that he provides Chutney powder in a pouch along with Gota Mix and Bhajiya Mix and no extra amount is collected for such Chutney powder and that he is charging a single price for the combined supply of Gota Mix and Chutney powder or Bhajiya Mix and Chutney powder. Further, as discussed earlier, since the aforementioned supply is not a composite supply of goods and a single price is being charged for the combined supply of Gota Mix and Chutney powder or Bhajiya Mix and Chutney powder, it will be considered as a 'Mixed supply' of goods. 14.2 Now, since it has been established that the above supply of goods made by the applicant is a 'mixed supply' of goods, we are required to examine the classification and tax liability on the same. For this purpose, we will be required to refer to Section 8 of the CGST Act, 2017, which reads as under: "The tax liability on a composite or a mixed supply shall be....