TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 741
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....(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, subject to the conditions as in the ANNEXURE]." 3. The applicant submits as follows: The composition and ingredients contained in the different types of Flours is submitted which clearly reveals that it does not contain maize flour or wheat flour. The products as mentioned as above are nothing but flours. The applicant also supplies a small pack of masala (spices) necessary to prepare a particular food item from that flour. But that does not make any difference in the main product. The small pack of masala is placed in the packet of flour for the convenience of the customer. So as per understanding of the applicant, the flour manufactured and sold by it fall under HSN 1102 and, hence, taxable at 2.5% CGST + 2.5% SGST. 4. Thus, considering the overall facts and circumstances of the case vis-a-vis the entries in question, the applicant submitted that Flours of different varieties as stated above, are eligible to be classified under the Tariff Headin....
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....on has been arisen for applicability of tariff to the products mentioned in the application i.e. Khaman Flour, Gota Flour, Dahiwada Flour, Dalwada Flour, Dhokla Flour, Idli Flour and Dosa Flour in which HS code these items fall and at which rate GST should be charged on it and, therefore, this application was made. 9. The applicant submitted the details of raw materials used in various products as follows: Sl.No. Product Ingredients 1 Gota Flour (in powder form) Chick Peas Flour, Sugar, Wheat Flour, Iodised Salt, Red Chilli, Garam Masala Raising Agent [(INS 500(ii)], Black Pepper, Coriander, Ajwain, Fennel, Acidity Regulator (INS 330). Chutney Powder: Sugar, Dry Mango Powder, Salt, Red Chilli, Cumin, Coriander, Acidity Regulator (INS 330). 2 Khaman Flour (in powder form)- Bengal Gram Dal, Sugar, Iodised Salt, Raising Agent [(INS 500(ii)], Acidity Regulator (INS 330). 3 Dalwada Flour (in powder form)- Green Gram Dal, Iodised Salt, Raising Agent [(INS 500(ii)], Acidity Regulator (INS 330). 4 Dahi-wada Flour (in powder form)- Black Gram Dal, Green Gram Dal, Iodised Salt, Raising Agent [(INS 500(ii)], Acidity Regulator (INS 330). 5 Dhokla Flour (in powder form)- Rice....
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....our or Wheat Flour. The applicant, therefore, sells this flour under the HSN code 1106 and, hence, the GST is charged @ 2.5% CGST and 2.5% SGST. 14. Further, it may be appreciated that as per legal interpretation in the case of West Coast Waterbase Pvt. Ltd. Vs. State of Gujarat - (2016) 95 VST 370 (Guj.), wherein the said principle has been laid down by Honourable High Court that when there is no material change in the entries, the classification adopted in earlier law should continue to prevail and accepted. 15. The applicant further submitted that under the above facts and circumstances, the applicable tariff schedule shall be HSN Code 1106 with applicable GST Rate of 5% (2.5% CGST + 2.5% SGST). In support of view of applicability of HSN Code 1106 and taxability @5% (2.5% CGST + 2.5% SGST), the following legal pronouncements may be considered in framing Ruling: (a) The applicant's own Determination Order No. 2010/D/171-177/No.356-359 dated 12.08.2010 passed under VAT regime in relation to the classification of cereals and pulses flour wherein Gota Flour, Khaman Flour, Dalwada Flour, Dahiwada Flour, Dhokla Flour, Idli Flour and Dosa Flour are covered by entry no. 12 (ii) of t....
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....ry out mixing process but also need to add spices, condiments and flavours etc. and other things as may be required. The recipe of preparing various Indian dishes by using the said mixed flours is also described on packet itself. In nutshell, for preparing Indian dishes, one has to carry out process prescribed on food packet such as boiling, frying or cooking etc. for preparation of products for consumption. Further, significant process is required to be carried out on mixed flour to prepare final Indian dish which one can eat. From the above, it is clear that Khaman Flour, Gota Flour, Dal Wada Flour, Dahi Wada Flour, Dhokla Flour, Idli Flour and Dosa Flour are not ready to eat products but its flour which is mixed with certain spices which make it ready to cook and not ready to eat or directly consume by consumer. 18. The applicant further submitted that from the above, it can be interpreted that; (i) The Flour falls under the HSN Code 1106 as mentioned herein above; (ii) The tax rate in the GST regime shall be as per tariff rate under HSN Code 1106 i.e. 5% (2.5% CGST + 2.5% SGST); (iii) The Khaman Flour, Gota Flour, Dal Wada Flour, Dahi Wada Flour, Dhokla Flour, Idli Flo....
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....he tariff 210692 @12% (6%+6%) and the Dosa, Idli instant preparation such as batter is taxable under the heading 2106 at the rate of 5% (2.5%+2.5%) therefore, its preparation and raw material cannot be taxed at a higher rate than the resultant product. The product is carrying its essential raw material and on the packet the recipe is shown to enable one to prepare it for consumption. Hence, the product under consideration shall not be charged with a rate of higher than the final product. (iii) Farsan /preparations of products under consideration when served ready to eat in market /restaurants/food shops its taxed at the rate of 5% (2.5%+2.5%) : Khaman, Gota , Dalwada , Dahiwada, Dhokla, Idli and Dosa are the preparation which are served in the hotels or dining or restaurants or food shops in common parlance, where the maximum rate collected from the customer is 5%, where as the product under consideration in this application are of such a nature that the customer can take it at home and prepare it by following its instructions on packet instantly by following cooking process. Logically, it is consumed by the customer due to various reasons such as; i) Good quality of raw ma....
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....c. cannot be considered as any instant ready to eat or consume food and also cannot be considered as any sort of food preparation. Rather, the more correct classification for it is as "Flour" under the tariff heading 1106 under rule 3(b) of the Custom Tariff classification rules i.e. when there is any mixture of products which does not have specific classification, the item should be classified as product which gives the essential character and identification to the mixed product. This view is supported by Hon. Apex court in its judgement in the case of the Collector of Central Excise V/s Bakelite Hylam Ltd. (1997) 10 SCC 350 wherein Rule 3(b) of the Rules of interpretation was applied. 21. Revenue's Submission: i. Vide letter dated 19-4-21, CGST Gandhinagar Commissionerate submitted that they have undertaken an enquiry in respect of subject questions raised by the applicant in the subject application filed and submitted that the application is not maintainable under the law. Section 98(2) of CGST Act, 2017 which stipulate that "the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case o....
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....e initiate enquiry post filing of application, it would not be legal and proper to dismiss the application without Ruling. 26. We hold that Classification of goods under GST is based on HSN. The customs Tariff is based on HSN. The general Interpretative Rules are to be sequentially followed as the way to classify the goods. We are to classify within the confines of law and procedure as laid down in GST regime. The Section notes and chapter notes of Custom Tariff are part and parcel of the Custom Tariff Act, 1975 which is to say, part and parcel of law enacted by the Parliament and therefore, we are obliged in GST regime to follow the classification based on HSN as per law. The Explanatory notes to HSN have guidance value to classify goods. The applicant's view to take into account Vat Determination order and the case laws cited by the applicant pertaining to VAT regime does not hold ground in wake of GST classification based on Harmonised System of Nomenclature ( HSN) and the Rules framed for classification, which was not the case with the Schedule-I of the Gujarat Value Added Tax Act, 2003. The applicant reasons that Khaman, Gota , Dalwada , Dahiwada, Dhokla, Idli and Dosa are th....
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....redients we find that Spices and other ingredients apart from flour of dried leguminous vegetables, rice and wheat are contained in different proportions. The Spices and other ingredients contained in these products include Sugar, Iodised Salt, Red Chili Powder, Garam Masala, Black Pepper, Coriander, Ajwain , Fennel, Acidity Regulator (INS 330) means Citric Acid etc. The proportion of Spices and other ingredients contained in these products ranges from 5% to 27%. The proportion of Spices and other ingredients is 27% in Khaman Flour, 27% in Gota Flour, 7% in Dhokla Flour, Idli Flour, Dalwada Flour, 6% in Dahiwada Flour, 5% in Dosa Flour. As the products of the applicant contain Spices and other ingredients in different proportions, which are not mentioned in the Chapter Heading 11.06 or the relevant Explanatory Notes of HSN, the said products are not covered under Chapter Heading 1106. 29. The applicant has referred to CBIC Circular No. 80/54/2018-GST dated 31.12.2018, which has inter-alia clarified the applicability of GST on 'Chhatua or Sattu' as follows - 3.1 Doubts have been raised regarding applicability of GST on Chhatua (Known as "Sattu" in Hindi Belt). 3.2 Chhatua or Sa....
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....f all the said 7 products, then ready for human consumption. The applicant submitted that the products are not 'ready to eat' but can be said as 'ready to cook'. We find that that Chapter Heading 2106 not confined to processed or semi processed food, cooked or semi cooked food, preserved food and ready to eat food. In fact, any product which is a food preparation and which is not elsewhere specified or included in the CTA, 1975, gets covered under HSN 2106. On the packet of 6 products- Category : Instant Mixes has been printed on the right hand lower corner of the packet and the detailed procedure recipe is printed as shown in the packet. The photos of back side of the packet of five products for the sake of illustration is reproduced here as follows: 30.2 Further applicant vide subject application submits that products are commercially known as Instant Mix Flour. We find no merit to treat the subject goods as flour. As these products are not specifically mentioned under any specific Tariff item of HSN 2106, the products merit classification under the residual entry 'other' at HSN 21069099 We are of the view that the 7 products of Mix Flour / Instant Mix Flour are appropriately ....