TaxTMI 
TaxTMI 
2021 (8) TMI 352
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....uestions:- i) Whether Stainless steel cans of 40 liters capacity is liable to be classified under HSN code 7310 or 7323. ii) Whether flavored milk is liable to be classified under HSN code 0402 99 90 or under 2202 99 30. iii) Whether milk cream is liable to be classified under HSN code 0403 or 0401. iv) Whether cold coffee is liable to be classified under HSN code 0402 99 90 or under 2202 99 30. v) Whether provision of subsidized lunch and refreshments to employees through contractors is to be treated as supply and if yes under which tariff classification it has to be classified. 3. The applicant furnishes the following relevant facts having a bearing on the questions on which Advance Ruling is sought. i) CLASSIFICATION & RATE OF GST APPLICABLE ON STAINLESS STEEL MILK CAN WITH LID OF 40 LTS CAPACITY The applicant is purchasing stainless steel cans of 40 liters capacity for resale of the same to members for storage of milk. The steel cans are purchased from outside the state. The supplier of the stainless steel can was classifying the same under HSN code 7310 and IGST was collected @18%. However recently the said supp....
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.... Total 100 % Our understanding is that one has to follow classification Rules for classifying the product. As per the Customs Tariff Act, 1975 chapter 4 specifically covers dairy produce, birds' egg, and natural honey, edible products of animal origin not elsewhere specified or included. Further subheading 0402 covers "Milk and cream, concentrated or containing added sugar or other sweetening matter". As per chapter note 4(b) of chapter 4 of first schedule to the customs tariff Act, 1975 "this chapter does not cover products obtained from milk by replacing one or more of its natural constituents (for example butyric fats). Flavored milk is made from milk added with sugar and permitted flavors, which do not alter its essential character of milk. If the natural constituents of the milk are replaced with any other substance, flavored milk could not fall under chapter-4 Further chapter 22 covers Beverages, Spirits and vinegar. As per note 3 of chapter 22 of first schedule to the Customs Tariff Act, 1975 "For the purpose of heading 2202, the term non-alcoholic beverages mean beverages of an alcoholic strength by volume not exceeding....
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....thereof. (b) "Reconstituted cream" means cream obtained by reconstituting milk products with or without the addition of potable water and with the same end product characteristics as the product described in sub-item (a) of item 1 of this sub-regulation. (c) "Recombined cream" means cream obtained by recombining milk products with or without the addition of potable water and with the same end product characteristics as the product described in sub-item (a) of item 1 of this sub-regulation. (d) "Prepared creams" means the milk products obtained by subjecting cream, reconstituted cream or recombined cream or any combination of these, to suitable treatments and processes to obtain the characteristic properties as specified below: (i) "pre-packaged liquid cream" means the fluid milk product obtained by preparing and packaging cream, reconstituted cream or recombined cream, or any combination of these for direct consumption or for direct use as such; (ii) "whipping cream" means the fluid cream, reconstituted cream and recombined cream or any combination of these, that is intended for whipping. When cream is intended for use by the final consu....
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....The product that remains after the removal of milk fat by churning milk and cream to manufacture butter and milk fat products (often referred to as buttermilk) and that may have been concentrated or dried. (b) Permitted ingredients. - Only those ingredients listed below may be used for the purposes and product categories specified, and only within the limitations specified. The product shall be free from any ingredient foreign to milk except otherwise provided in this standard. For use in products only for which stabilizers or thickeners, or both, are justified (see item 3): - Products derived exclusively from milk or whey and containing 35.0% (m/m) or more of milk protein of any type (including casein and whey protein products and concentrates and any combinations thereof) and milk powders; these products can be used in the same function as thickeners and stabilizers, provided they are added only in amounts functionally necessary not exceeding 20.0 g/kg, taking into account any use of the stabilizers and thickeners permitted as per the Food Safety and Standards (Food Products Standards and Food Additives) Regulation, 2011; Additionally, for use ....
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....uch declaration to be given on the container from which product will be offered for sale to the consumer. Creams which have been manufactured by the recombination or reconstitution of dairy ingredients shall be qualified with the term "Recombined" or "Reconstituted" as appropriate. If the product conforms to the description in sub-item (e) of item 1, the name of the product shall be 'Malai (b) Cream may be labelled according to milk fat content (m/m) along with product name as specified in item 1 of this Standard, as follows, - (i) Low fat cream: Minimum 10 per cent, and less than 40 per cent.; (ii) Medium fat cream: Minimum 40 per cent, and less than 60 per cent.; (iii) High fat cream: Minimum 60 per cent. (c) Labels on packages of fermented creams may include reference to the starter culture used for fermentation. (d) The heat treatment, as per the sub-regulation 2.1.1 relating to General Standards for Milk and Milk Products, to which the product has been subjected to, shall be declared on the label. (e) In addition to the above-mentioned labelling requirements, the provisions of the Food Safety and Stand....
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....s "Milk and cream, concentrated or containing added sugar or other sweetening matter". As per chapter note 4(b)of chapter 4 of first schedule to the customs tariff Act ,1975 "this chapter does not cover products obtained from milk by replacing on or more of its natural constituents (for example butyric fats). Cold Coffee is made from milk added with sugar and coffee, which do not alter its essential character of milk. If the natural constituents of the milk are replaced with any other substance , cold coffee could not fall under chapter-4 Further chapter 22 covers Beverages, Spirits and vinegar. As per note 3 of chapter22 of first schedule to the Customs Tariff Act, 1975 "For the purpose of heading 2202, the term non-alcoholic beverages mean beverages of an alcoholic strength by volume not exceeding 0.5% vol. Alcoholic beverages are classified in heading 2203 to 2206 or heading 2208 as appropriate." Further chapter22 does not cover liquid dairy products of chapter 4 as per the chapter notes of 22 and we also understand that chapter 2202 covers beverages made up of a concentrate manufactured or prepared with an alcoholic content less than 0.5%of volume. In....
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....cation of certain products. We proceed to examine the classification of each product one at a time. In this regard it is pertinent to mention here that in respect of Tariff Headings and determination of Classification, Explanations (iii) and (iv) appended to the Notification No. 01/2017- Central Tax (Rate), dated 28.06.2017 are relevant. The said explanations are reproduced below for ease of reference.- (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. Accordingly we make a reference to the Section Notes and Chapter Notes of the relevant Chapters of the Customs Tariff and also the corresponding Explanatory Notes. 13.6 The first question is with regard to the classification of Stainless Steel cans of 40 ltrs capacity, which were....
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....7.2021, same information that was furnished with the application about the standards for cream under Food Safety & Standards Authority of India (FSSAI) and not furnished any information substantiating their classification under HSN 0403. Thus no ruling is given in this regard for lack of adequate information. 13.9 The fourth question is with regard to the classification of the product "Cold Coffee Flavoured Milk". This question is also similar to the second question except that the flavor is of coffee. In this case the flavor is coffee specific. Therefore this question is similar to the second one and hence no ruling is given even in respect of this question for the reasons stated above at para 13.7 supra. 13.10 The fifth and last question is with regard to the canteen services. The applicant provides lunch and refreshments to its employees, by engaging a contractor & a premises is provided to the contractor in the area of the applicant's factory. The contractor has to cook food, eatables and provide the same to the employees of the applicant at the rate specified by the applicant. The bill for the supply of food to the employees is paid by the applicant. The applicant co....