TaxTMI 
TaxTMI 
2021 (8) TMI 838
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....from 70% to 90%. (f) The flour mix is then subjected to quality inspection and testing. (g) The flour mix is thereafter packaged and stored for dispatch. 3. Table showing constituent components of instant mix flours(as per table Annexure-B(revised) submitted by them on 2-7-21) is as under: Sr.No. Product Name (A) Dried Leguminous Vegetable Flours (B) Rice & Wheat Flours Total Flours (A+B) (%) (C) Additives (D) Spices Total (A+B+C+D) (%) Bengal Gram (Chana Dal) (%) Black Gram (Udad Dal) (%) Green Gram (Moong Dal) /Red Gram (Toor Dal)% Total (%) Rice Flour (%) Refined Wheat Flour (%) Wheat Flour (%) Total (%) Additives (%) Name of Additives Spices (%) Name of Spices 1 Gota Instant Mix Flour 400 gm (including chutney powder of 40 gm) 66.60 66.60 0.00 66.60 25.60 Sugar, Iodised Salt, Raising agent (Sodium bicarbonate INS 500(ii)), Acidity regulator (Citric acid INS 330) 7.80 Chilli Powder, Garam Masala Powder, Black Pepper Crushed, Coriander Crushed, Ajwain, Fennel 100.00 1A Chutney Powder 40 gm Crushed Sugar....
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.... INS 500(ii)) 7.25 Dry Fenugreek Leaves (Kasuri Methi), Coriander Crushed, Black Pepper Crushed, Turmeric Powder, Chilli Powder, Compounded Asafoetida, Garam Masala Powder, Ajwain 100.00 9A Kadhi Powder 40 gm Crushed Sugar, Iodised Salt, Hydrogenated Vegetable Oil, Acidity regulator (Citric acid INS 330) White Chilli Powder, Mustard Seed, Turmeric Powder, Fresh Curry Leaves, Compounded Asafoetida 10 Handvo Instant Mix Flour 400 gm 15.00 8.00 15.00 38.00 33.00 8.00 41.00 79.00 19.00 Sugar, Iodised Salt, Acidity regulator (Citric acid INS 330), Raising agent (Sodium bicarbonate INS 500(ii)) 2.00 Chilli Powder, Turmeric Powder 100.00 4. Diagrammatic process flow chart is as follows: 5. The Schedule entry as contained in Schedule I of Notification No. 1/2017 - Central Tax (Rate) dated 28.6.2017 reads as follows: S.No. Chapter /Heading /Sub-heading/ Tariff item Description of Goods Rate of tax 54. 1101 Wheat or meslin flour 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 cour....
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....t flour mix Dominant flour component HSN heading Gota Instant mix flour Chana Dal 1106 Khaman Instant mix flour Chana Dal 1106 Dalwada Instant Mix Flour Moong Dal 1106 Dahiwada Instant Mix Flour Udad Dal 1106 Idli Instant Mix Flour Rice 1102 Dhokla Instant Mix Flour Rice 1102 Dhosa Instant Mix Flour Rice 1102 Pizza Instant Mix Flour Wheat 1101 Methi Gota Instant Mix Flour Chana Dal 1106 Handvo Instant Mix Flour Rice 1102 6.3 Such classification is supported by Rule 3(b) of General Rules of Interpretation 1. The General Rules of interpretation of customs tariff have been specifically borrowed by clause (iv) of the Explanation to the Rate Notification which reads as follows: "Explanation. - For the purposes of this notification,- (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." 2. The relevant extract of such rules of interpre....
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....icant relies upon the judgement of Hon. Supreme Court in the case of The Collector of Central Excise v/s Bakelite Hylam Ltd. (1997) 10 SCC 350 which is squarely applicable in this case, wherein the following was observed while applying Rule 3(b) of the Rules of interpretation: "The other interpretation is Rule 3(b) which provides that mixtures or composite goods consisting of different materials which cannot be classified with reference to Rule 3(a) as in the present case, are to be classified as if they consisted of the material or component which gives them their essential character. In the present case, the essential character of a decorative laminated sheet is its rigidity or strength and its resistance to heat and moisture. These are essentially characteristics which are imparted by resins. Paper does not process any of these characteristics. Therefore, applying Rule 3(b) and going by the essential characteristics of such laminated sheets, these goods are more appropriately classifiable under chapter 39." The aforementioned judgement is squarely applicable in the case of the applicant. 6.6 The applicant is further supported in its contention by a circular no. 80....
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....C), this Court held that the whole objective of such Circulars is to adopt a uniform practice and to inform the trade as to how a particular product will be treated for the purposes of excise duty. The Court also held that it does not lie in the month of the Revenue to repudiate a Circular issued by the Board on the basis that it is inconsistent with a statutory provision (emphasis supplied). Consistency and discipline are, according to this Court, of far greater importance than the winning or losing of court proceedings. In the case of Collector of Central Excise, Bombay v. Jayant Dalai Pvt. Ltd. 1996 (88) ELT 638 (SC), this Court has held that it is not open to the Revenue to advance an argument or even file an appeal against the correctness of the binding nature of the Circulars issued by the Board. Similar is the view taken by this Court in the case of Collector of Central Excise, Bombay v. Kores [India] Ltd. 1997 (89) ELT 441 (SC)." 6.8 The applicant further points out that for the same products Kitchen Xpress Overseas Limited had filed application for determination under Section 80 of the Gujarat Value Added Tax Act, 2003 (herein after referred to as "the Vat Act"). The re....
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....Moong bhajiya mix flour, Chorafali mix flour, Bhajiya mix flour, Dhokla mix flour, Idli mix flour and Dosa mix flour are classifiable under sub- heading 11061000 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). They appear at Entry No.59 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and the GST liability on all these products is 5%(2.5% CGST + 2.5% SGST). 7.1 The applicant submits that uniformity needs to be maintained in applicabilty of rate of tax in respect of identical products in accordance with fundamental right of equality as enshrined under Article 14 of the Constitution of India. Reference may be made in this regard to the following judgements of Hon. Supreme Court: (a) Ayurveda Pharmacy v/s State of Tamil Nadu (1989) 2 SCC 285; (b) State of Uttar Pradesh v/s Deepak Fertilizers & Petrochemical Corporation Ltd. (2007) 10 SCC 342. 7.2 The applicant clarifies that they are aware of the technical criteria for flour to be classifiable under heading 1101/1102 as contained in General Chapter Note 2(B) of the HSN. The applicant submits that the flour mixes containing rice/wheat flour fulfill such criteria. Pr....
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.... "2(30) "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply; 2(74) "mixed supply" means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. Illustration.- A supply of a package consisting of canned foods, sweets, chocolates, cakes, 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;" 8.3 Thus if two or more supplies are naturally bundled in t....
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....he third question is concerned, a masala pack is inserted in the instant khaman mix flour which consists of 30% chana dal flour and 70% Sodium bicarbonate. The only reason why it is supplied in a separate packet and not mixed in the flour is because it enhances the quality of the khaman if added at the time of cooking. Such masala pack is part and parcel of the supply of instant mix khaman flour and the entire supply is taxable under heading 1106 at the rate of 2.5% CGST + 2.5% SGST for the reasons already given herein before. The applicant says that the sole fact that the same is supplied separately for enhancing quality of the preparation cannot make it a separate supply. 9.2 Alternatively, in any case, supply of instant khaman mix flour along with masala pack is a composite supply and therefore taxable at the applicable rate of tax for the principal supply i.e. khaman mix flour. The masala pack is a mixture of chana dal flour along with sodium bicarbonate. It can only be used for making the khaman. The masala pack is therefore naturally bundled in the ordinary course of business along with supply of khaman and therefore in any case the composite supply is taxable at the rate ....
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....an, dalwada and dhokla is simply a mixture of flour with few additives and therefore qualify for classification under HSN 1106; that inspite of decision of GAAAR in Talod Gruh Udyog, items viz. Idli, Dhosa, Khaman, Dahiwada and Dhokla which are mixture of flours with addition of very small amounts of additives gets covered under HSN 1106 and if goods are branded, it is to be charged @5%. 11. The applicant vide their additional submission dated 2-7-21 stated that the details of percentage of the ingredients of their products given in Annexure-B is correct. However, they have re-arranged the same in a more logical way in Annexure-B(revised), hence Annexure-B submitted earlier stands revised. B. Question on which Advance Ruling sought: (a) What is the applicable rate of tax under the GST Acts on supply of instant mix flours for gota, khaman, dalwada, dahiwada, idli, dhokla, dhosa, pizza, methi gota and handvo? (b) What is the applicable rate of tax under the GST Acts on supply of instant mix flour for gota/methi gota along with chutney powder/kadhi chutney powder? (c) What is the applicable rate of tax under the GST Acts on supply of khaman along with ....
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....OF CHAPTER 8: 1106 10 00- Of the dried leguminous vegetables of heading 0713 1106 20- Of sago or of roots or tubers of heading 0714: 1106 20 10--- Of sago 1106 20 20 --- Of manioc (cassava) 1106 20 90--- Of other roots and tubers 1106 30 - Of the products of Chapter 8: 1106 30 10--- Of tamarind 1106 30 20--- Of singoda 1106 30 30--- Mango flour 1106 30 90--- Other (A) Flour, meal and powder of the dried leguminous vegetables of heading 0713: As per Rule 1 of the General Rules for the Interpretation of CTA, 1975, for legal purposes, classification shall be determined according to the terms of the headings and any relative Section of Chapter Notes. Thus, the classification of the product is required to be determined in accordance with the terms of the headings. As per Chapter Heading11.06, it covers Flour, Meal and Powder of the dried leguminous vegetables of Chapter Heading 07.13 and other specified products. On inspection of the Packets of each product, we find that each of the packet is marked ' Instant Mix'. On examination of the list of ingredients we find that Spices and additi....
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.... 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 criterion of passage through a standard sieve as required by paragraph (B) of that Note. Flours of this heading may be improved by the addition of very small quantities of mineral phosphates, anti-oxidants, emulsifiers, vitamins or prepared baking powders (self raising flour). Wheat flour may be further enriched by an addition of gluten, generally not exceeding 10%. The heading also covers 'swelling' (pregelatinised) flours which have been heat treated to pregelatinise the starch. They are used for making preparations of heading 19.01, bakery improvers or animal feeds or in certain industries such as the textile or paper industries or in metallurgy (for the preparation of foundry core binders). Flours which have been further processed or had other substances added with a view to their use as food preparations are excluded (generally heading 19.01). This heading also excludes flours mixed with cocoa (heading 18.06 if they contain 40% or mor....
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.... from the Chapter Heading 1101 or 1102. 19. The various products being supplied by the applicant contain Spices and additives apart from flour of dried leguminous vegetables, rice and wheat, in different proportions. The Spices and additives contained in these products include Sugar, Iodised Salt, Chili Powder, Turmeric powder, Sodium Bicarbonate, Citric Acid, Hydrogenated Vegetable Oil, Citric Acid etc. These Spices and additives are other than those substances mentioned in the Explanatory Notes of HSN for Chapter Heading 11.01 and 11.02 which could be added in very small quantities to improve or enrich the flours and the resultant product still remain classified in those Chapter Headings. The proportion of Spices and other additives contained in these products ranges from 5.5% to 29.25%. The proportion of Spices and other additives is 7% in Idli Instant mix flour, 12.5% in Dhokla Instant mix flour, 5.5% in Dhosa Instant mix flour, 21% in Handvo Instant mix flourand 24.50% in Pizza Instant mix flour. It is also evident from the recipe submitted by the applicant that the Spices and additives have been added to the flours with a view to their use as food preparations. As such, in....
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....'.' 22. We note that HSN 2106 covers Food Preparations not elsewhere specified or included. The Explanatory Notes of HSN for Chapter Heading 2106 provides as follows :- "Provided that they are not covered by any other heading of the Nomenclature, this heading covers : A) Preparations for use, either directly or after processing (such as cooking, dissolvingor boiling in water, milk, etc.), for human consumption. B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics(appearance, keeping qualities, etc.) (see the General Explanatory Note to Chapter 38). ......." 23. The subject 10 products of Mix Flour/ Instant Mix Flour are preparations for use, after processing, such as cooking, carrying out the detailed procedure for cooking as mentioned on the packets of all the said products, then ready for human consu....
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....able under HSN 2106. APPLICABLE RATE OF GOODS AND SERVICES TAX 26. The various Instant Mix/Ready Mix Flour being supplied by the applicant classifiable under HSN 2106 and in precise subheading 2106 90. 26.1 Notification No. 1/2017-Central Tax (Rate) dated 28-6-17, as amended, entry at Sr. No. 23 of Schedule - III reads as follows - S.No. Chapter/ Heading/ heading/ item Sub-Tariff Description of Goods 23. 2106 Food preparations not elsewhere specified or included [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods] 26.2 Thus, 'Food preparations not elsewhere specified or included' falling under Chapter Heading 2106 are covered under the aforesaid Entry at Sr. No. 23 of Schedule- III of Notification No. 1/2017-Central Tax, as amended, attracting Goods and Services Tax @ 18% (CGST 9% + SGST 9%), though some of the specific products of Chapter Heading 2106 excluded from this entry are covered under different entries of Schedule-I or Schedule-II, attracting Goods and Services Tax @ 5% or 12%. None of....
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....l be determined in the following manner, namely:- (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax." 28.2 "composite supply" and "mixed supply" are as follows: "2(30) "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply; 2(74) "mixed supply" means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitut....