TaxTMI 
TaxTMI 
2024 (6) TMI 108
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....at [hereinafter referred to as 'appellant'] against the Advance Ruling No. Guj/GAAR/R/32/2021 dated 30.7.2021, passed by the Gujarat Authority for Advance Ruling [GAAR] 3. The facts briefly are that the appellant is a supplier of Khaman flour, Gota flour, Dalwada flour, Dahiwada flour, Dhokla flour, Idli flour and Dosa flour in a unit container bearing brand name of 'KITCHEN XPRESS'. 4. Before the GAAR, the appellant submitted that the below mentioned process is undertaken for manufacturing & selling the above products, viz: (a) They purchase food grains and pulses from open market. (b) These pulses are then sorted, cleaned and then sent to grinding machine. (c) Pulses are grinded into flour in grinding machine for e.g. where Grams are purchased, it results into gram flour consequent to grinding process. In certain cases, the appellant also purchases grinded flour directly from the vendors. (d) Certain spices are mixed in flour and such mixed flour is packed in various packings. (e) Lastly, a small packet of spices necessary to prepare food item is supplied in pouch with packing of flour for added taste. (f) Mixed flour (c....
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.... 93% - - - 0% 93% 7% 4 Dahi-wada Flour - 86% 8% 94% - - - 0% 94% 6% 5 Dhokla Flour 15% 12% - 27% - - 66% 66% 93% 7% 6 Idli Flour - 27% - 27% - - 66% 66% 93% 7% 7 Dosa Flour - 20% - 20% - 16% 59% 75% 95% 5% 7. The appellant further submitted that the composition and ingredients contained in the different types of flours does not contain the Maize flour or Wheat flour and hence, sells this flour under the HSN code 1106 wherein the GST is charged @ 2.5% CGST and 2.5% SGST. 8. Relying on the VAT determination orders, passed in the earlier VAT regime, the appellant further stated that the appropriate HSN and GST rate for the products under the consideration ought to be as under: Sr. No. Product HSN Code Rate Ingredients 1 Gota Flour 1106 5% The said instant mixed flour is prepared from the 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 Determina....
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....pecifically 1106 and should be charged by rate of 5% (2.5%+2.5%). (vii) The basic character of the products remains "flour" even after addition of spices and salt in very small amount of quantity. 11. The appellant, in his averment before the GAAR further stated that: (i) The flour falls under the HSN code 1106; (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 flour and Dosa flour are flours with some added spices and are not ready to eat products and does not fall under HSN code 2106. 12. In view of the foregoing, the appellant raised the following question before the GAAR viz: Under which Chapter, Tariff Heading and HSN, the different varieties of Flours i.e. Gota Flour, Khaman Flour, Dalwada Flour, Dahiwada Flour, Dhokla Flour, Idli Flour and Dosa Flour manufactured and supplied by applicant will attract CGST/SGST? Vide the aforementioned impugned order dated 30.7.2021, the GAAR ruled as follows viz: The products i.e. i. Gota Flour ii. Khaman Flour iii. Dalwada Fl....
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....Instant Mix flour are appropriately classifiable under HSN 2106. • 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-Ill of notification No. 1/2017-Central Tax, as amended, attracting GST @ 18% (CGST 9% + SGST 9%); that none of the aforesaid 7 products of various Instant Mix/Ready Mix flour being supplied by the appellant are the products which have been excluded from the entry at Sr. No. 23 of Schedule-III or have been specifically included in any other entry of other Schedule of notification No. 1/2017-Central Tax, as amended or in any of the entries of notification No. 2/2017-Central Tax. 15. Feeling aggrieved, the appellant is before us i.e. Gujarat Appellate Authority for Advance Ruling [GAAAR] raising the following averments viz • that the GAAR erred in not considering that the goods supplied are of a nature that one can easily recognize as flour & not instant mix; • the GAAR classified the goods under 210690 which is not correct as there is a specific head ie 1102 or 1106 for the goods in question; that the GAAR failed to ap....
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....not less, by weight than that shown against the cereal concerned, otherwise, they fall in heading 11.03 or 11.04. It has also been inter-alia mentioned that this Chapter includes products obtained by submitting raw materials of other Chapters (dried leguminous vegetables, potatoes, fruit, etc.) to processes similar to those indicated in paragraph (1) or (2) mentioned therein. Thus, the products from the milling of the cereals, dried leguminous products etc. are covered in Chapter 11 of the Customs Tariff Act, 1975. 20. Ihe appellant also claims that their product was erroneously classified under 2106 09 when it should have been classified under 1102 or 1106. To examine this claim, we think it prudent to reproduce the explanatory notes of both HSN 1102 and 1106, viz 11.02 11.02 - Cereal flours other than of wheat or meslin. 1102.20 - Maize (com) flour 1102.90 - Other This heading covers flours (i.e., the pulverised products obtained by milling the cereals of Chapter 10) other than flours of wheat or meslin. Products of the milling of rye, barley, oats, maize (com) (including whole cobs ground with or without their husks) grain....
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....inate toxic substances; this treatment may entail pregelatinisation of the starch. The heading does not cover starches obtained from these sources (it should be noted that the starch obtained from sago is sometimes called "sago flour"). These starches fall in heading 11.08 and can be distinguished from the flours of this heading, because flours, unlike starches, do not crackle when rubbed between the fingers. Pelletised flour, meal and powder of sago or of roots or tubers of heading 07.14 are also excluded (heading 07.14). (C) Flour, meal and powder of the products of Chapter 8. The principal fruits or nuts of Chapter 8 which are made into flours, meals or powders are chestnuts, almonds, dates, bananas, coconuts and tamarinds. The heading also includes flour, meal and powder of peel of fruits. However, the heading does not cover tamarind powder in packings for retail sale for prophylactic or therapeutic purposes (heading 30.04). Products of this heading may be improved by the addition of very small amounts of anti-oxidants or emulsifiers. The heading also excludes : (a) Sago pith (heading 0744). (b) Pr....
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.... products of Chapter 8: 1106 30 10 --- Of tamarind 1106 30 20 --- Of singoda 1106 30 30 --- Mango flour 1106 30 90 --- Other Now, as is evident, Chapter Heading 11.06 covers "Flour, Meal and Powder of the dried leguminous vegetables of Heading 0713, of sago or of roots or tubers of Heading 0714 or of the products of Chapter 8". As per Rule 1 of the General Rules for the Interpretation of Customs Tariff Act, 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 Heading 11.06, it covers Flour, Meal and Powder of the dried leguminous vegetables of Chapter Heading 07.13 and other specified products. As the products of the appellant 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, we find that the said products are not covered under Chapter Heading 11.06. 21.1 Though the appellant before us has contended that his goods meri....
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....ted 28.06.2017). The CBIC has clarified in the aforesaid circular that the flour of ground pulses and cereals, improved by the addition of very small amounts of additives continues to be classified under HSN Code 1106. However, the said clarification is not applicable in the present case as the products being supplied by the appellant contain spices and other ingredients, which is not the case with the 'Chhatua or Sattu'. 24. In view of the foregoing, we hold that none of the products of the appellant merit classification under Chapter 11 of the Customs Tariff Act, 1975 and specifically under Chapter Headings 11.01, 11.02, 11.03, 11.04 or 11.06 of the Customs Tariff Act, 1975 25. The appellant we find has also questioned the classification of the products in question by GAAR under HSN 2106 90, which covers "Food Preparations not elsewhere specified or included". We find it prudent to reproduce the HSN explanatory notes [relevant extracts] for the ease of understanding viz 21.06 - Food preparations not elsewhere specified or included. 2106.10 - Protein concentrates and textured protein substances 2106.90 - Other Provided that they are not....