TaxTMI 
TaxTMI 
2021 (11) TMI 886
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.... 636301 (hereinafter called the 'Applicant') is registered under the GST Vide GSTIN 33AAGFR9140J1Z2. They have sought Advance Ruling on the following question:- Whether Notification No.39/2017-CT(R) dated 18.10.2017 read with G.O.Ms.No. 140 dated 17.10.2017 issued by the Commercial Taxes and Registration Department, would be applicable to the Applicant's activity of manufacture and supply of Fortified Rice Kernels to the Tamil Nadu Civil Supplies Corporation pursuant to the Pilot Scheme on "Fortification of Rice &, its Distribution under the Public Distribution System" project launched by the Central Government. 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 are engaged in the business of manufacture and supply of nutrition products such as complementary weaning food, energy food, fortified rice kernel, etc., and is also engaged in trading of agricultural commodities. The Government of Tamil Nadu had invited tenders from eligible ....
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....n)] in Grain Form or in the Form of Makes or Other Worked Grains (Except Flour, Groats and Meal), Pre-Cooked or Otherwise Prepared, Not Elsewhere Specified or Included". Therefore, the applicable rate of tax would still be 5% (2.5% CGST+ 2.5% SGST) on account of Notification 39/2017-CT(R) dated 18.10.2017 and G.O.Ms.No. 140 dated 17.10.2017 issued by the Commercial Taxes and Registration Department. They have stated that though the applicable rate of tax for Tariff Item 1904 in terms of S.No.15 of Schedule III to Notification No.01/2017 CT(R) dated 28.06.2017 would be 18% (9% CGST + 9% SGST) it is pertinent to note that Notification 39/2017 CT(R) dated 18.10.2017 notified the central tax rate of 2.5%, and G.O.Ms.No. 140 dated 17.10.2017 issued by the Commercial Taxes and Registration Department, notified the State tax rate of 2.5% on the intra-state supply of the below mentioned description of goods falling within Chapters 19 or 20 of the Customs Tariff Act, 1975:- "Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government" ....
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....ariff Act, 1985, that is packed in bags of specific quantities of 25 kgs or 50 kgs, as applicable to each such tendered, the applicant has submitted that the first condition of Notification 39/ 2017 CT(R) and G.O.Ms.No. 140 dated 17.10.20 17 issued by the Commercial Taxes and Registration Department, is fulfilled. • In respect of supply intended for free distribution to economically weaker sections of the society, the applicant has furnished the following submissions: • To address anemia and micro-nutrient deficiency in the country, Government of India approved the Centrally Sponsored Pilot Scheme on "Fortification of Rice its Distribution under the Public Distribution System" for a period of 3 years beginning 2019 20 with a total budget outlay of Rs. 174.64 crores. • The Press Information Bureau Chennai, on 25.09.2020, announced that the Fortified Rice Scheme would be implemented in Tiruchirapalli District from 01st October 2020, for all ration card holders in the district. Rice would be fortified with iron, folic acid and Vitamin B 12 to make it nutritious and will be distributed through 1224 ration shops in Trichy district. About 7.5 lakh c....
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....pvt Ltd. vs. CCE [2005 (185) ELT 430]. The Bench while extending the benefit of the exemption to the Assessee, observed as follows:- "It is not the case of the department that the goods have not been supplied to the Projects financed by International Organizations. The goods were supplied to various sub-contractors for the Golden Quadrilateral Project financed by Asian Development Bank. Goods have also been used for the Project. The notification nowhere stipulates that the excisable goods supplied should be directly paid for by the organization financing the project. Since the goods have admittedly been used for the project, the question of misuse of goods for unintended purposes, as noted by the Commissioner, does not arise." 2.6 In view of the aforesaid decision the applicant is of the view that Notification 39/2017-CT(R) read with G.O.Ms.No. 140 dated 17.10.2017 issued by the Commercial Taxes and Registration Department, nowhere mentions that the food preparations ought to be directly freely distributed to a weaker section of the society; it only uses the phrase "intended for free distribution to economically weaker sections of the society". Hence, their supply is wi....
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....y pulverizing rice that is provided by the Tamilnadu Civil Supplies Corporation ("TNCSC"), which is then mixed with a premix containing three rnicronutrients Vitamin B12, Folic Acid, and Iron. Subsequently, this mixture of rice flour and the premix of rnicronutrients are made to go through an extrusion machine which then produces kernels resembling rice grains. o They have submitted a detailed explanation of the manufacture of FRKs, as prescribed by the Food Safety and Standards Authority of India, The applicant stated that only a facility either a warehouse or a rice mill that, houses a dosing and blending system can produce FRKs. Therefore, it is implied that no ordinary rice mill can produce the FRKs. Moreover, such facilities are mandated to comply with World Health Organization's Good Manufacturing Practices (GMP), and food safety guidelines as per FSSAI standard guidelines. o It is also pertinent to note that the language used in FSSAI guidelines, reinforces the fact that FRKs are the result of an extremely technical manufacturing process that cannot be carried out in an ordinary rice mill. Upon the manufacture of the FRKs, it is supplied to the rice mil....
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....e also furnished NAWAL Analytical Laboratories Test Report dated 20.03.2021. The sample FRK has been tested and the percentage of starch and ash content has been submitted in the report. 4.1 Due to change in the constitution of the Authority, the applicant was again given an opportunity to be heard on 04.08.2021. The Authorised representative Ms. vipula appeared for the hearing virtually and reiterated their submissions. She stated that they are before this authority seeking clarification on the applicability of Notification 39/2017 to their product viz., Fortified Rice Kernels supplied based on the tender issued by civil supplies. She drew attention to Note 4 of chapter 19 of customs Tariff and stated that their product will be classifiable under chapter 19. The test report furnished by them has been already taken on record. Shri. V.V. Ramkumar, the State Jurisdictional officer appeared and stated that the Notification is applicable only to the final supplier who supplies to the economically weaker sections (EWS) of the society but in this case the applicant is not supplying to EWS. The Authorised representative in this connection relied on the decision of CESTAT Delhi in the c....
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....09.2021, virtually. The Authorized Representative, Ms. D.S.Vipula, Advocate appeared. She reiterated their submissions and stated that FRK is supplied in 25KG/50 Kg HDPE bags as per the tender condition; the notification states that the supply is to be 'intended for' and not 'for' distribution to Economically Weaker Sections; the supply is towards the Central Scheme for fortification of rice. The AR was asked to clarify:- 1. Whether they are supplying the KRK to rice mills approved by Civil Supplies only 2. as to how the certificate is issued by the Managing Director, whether tax invoice wise or proceeding wise 3. At what stage the sample was drawn and at whose presence. The AR stated that they would make additional submissions clarifying the above. They were also asked to furnish the FSSAI materials relied upon by them to explain the pulverization and extrusion of kernels. 4.4 In furtherance to the hearing held on 22.09.2021, the applicant submitted the following documents:- 1. Copies of monthly indents issued by the TNCSC along with details of mills to which supplies to be made.; 2. Copy of certificate issued by M....
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....question:- Whether Notification 39/2017-CT(R) dated 18.10.2017 read with G.O.Ms.No. 140 dated 17.10.2017 issued by the Commercial Taxes and Registration Department, would be applicable to the Applicant's activity of manufacture and supply of Fortified Rice Kernels to the Tamil Nadu Civil Supplies Corporation pursuant to the Pilot Scheme on "Fortification of Rice & its Distribution under the Public Distribution System" project launched by the Central Government. The question is on the applicability of notification issued under the provisions of the CGST Act, 2017 and so is found admissible under Section 97(2)(b) of the CGST Act, 2017. 7. Applicant has submitted that they are supplying the FRK which would fall within the ambit of Chapter 19 and the applicable rate would be 5% (2.5%CGST + 2.5% SGST) on account of Notification no.39/2017 -CT(R) dt. 18.10.20 17 and G.O.Ms No.140 dt. 17.10.2017 issued by the Commercial Taxes and Registration Department. With respect to classification under Chapter 19, applicant has submitted that FRK falls under Chapter heading 1903, which reads as under:- "Prepared foods obtained by the swelling or roasting of cereals or cere....
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....approved by the Central Government or the State Government concerned, within a period of five months from the date of supply of such goods or within such further period as the jurisdictional commissioner of the Central tax or jurisdictional commissioner of the State tax, or jurisdictional officer of the Union territory Tax as the case maybe, may allow in this regard. As seen above, the notification is applicable to,- • food preparations classifiable under Chapter 19 or 21 of the Customs Tariff made applicable to GST; • put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government; • subject to the condition that the supplier of such food preparations produces a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory concerned to the effect that such food preparations have been distributed free to the economically weaker sections of the society under a programme duly approved by th....
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.... 11/2021-(C.T.) Rate dated 30.09.2021, applies to FRK(Premix) falling under CTH 19 and supplied for ICDS or similar scheme duly approved by the Central/State Government. The FRK (Premix) being introduced specifically in the notification and the amendment from 'Food preparations' to 'goods' under column (4), implies that the same was not covered under the notification no. 39/2017-C.T. (Rate) until the said notification is amended. 9. In the case at hand, the applicability of the Notification was raised before us for the FRK(Premix) supplied by the applicant to the Designated Rice Mills for mixing with the Rice in a fixed proportion and distributing the same under the Scheme duly approved by the Government. As per the submissions, it has been established by the applicant, that the product satisfies the conditions for classifying under CTH 19 basis the Laboratory report furnished by them. It is also established that they undertake supply of FRK as per the tender conditions and supplies the same to the Designated Rice Mills for intended supply under the scheme on mixing the FRK with the Rice in the given proportion. It is also seen that the supply is made based on th....