TaxTMI 
TaxTMI 
2025 (2) TMI 94
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.... Changodar, Ahmedabad-382 213 [hereinafter referred to as 'appellant'] the against Advance Ruling No. GUJ/GAAR/R/29/2021 dated 19.7.2021, passed by the Gujarat Authority for Advance Ruling [GAAR]. 3. The facts briefly are that the appellant is engaged in the business of manufacture and supply of the below mentioned ten instant mix flours viz Dalwada instant mix flour Pizza instant mix flour Dahiwada instant mix flour Handvo instant mix flour Idli instant mix flour Gota instant mix flour + chutney powder Dhokla instant mix flour Methi Gota instant mix flour + kadhi powder Dhosa instant mix flour Khaman instant mix flour + masala pack which as per the appellant are not in 'ready to eat' but in 'ready to cook' form under their registered brand name. 4. Before the GAAR, the appellant submitted that the below mentioned process is undertaken for manufacturing & selling the above products, viz: (a) that they purchase food grains and pulses from vendors. (b) that such food grains/pulses are fumigated and cleaned for removal of wastage. (c) that food grains/pulses are then grinded and converted into flour.....
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.... bicarbonate INS 500(ii)), Acidity regulator (Citric acid INS 330) Nil N.A. 100.00 5 Idli Instant Mix Flour 400 gm 27.00 27.00 66.00 66.00 93.00 7.00 Iodised Salt, Acidity regulator (Citric acid INS 330), Raising agent (Sodium bicarbonate INS 500(ii)) Nil N.A. 100.00 6 Dhokla Instant Mix Flour 400 gm 15.00 12.00 27.00 60.50 60.50 87.50 12.50 Sugar, Iodised Salt, Raising agent (Sodium bicarbonate INS 500(ii)), Acidity regulator (Citric acid INS 330) Nil N.A. 100.00 7 Dhosa Instant Mix Flour 400 gm 20.00 20.00 59.00 15.50 74.50 94.50 5.50 Iodised Salt, Acidity regulator (Citric acid INS 330), Raising agent (Sodium bicarbonate INS 500(ii)) Nil N.A. 100.00 8 Pizza Instant Mix Flour 400 gm 0.00 75.50 75.50 75.50 24.50 Hydrogenated Vegetable Oil, Acidity regulator (Citric acid INS 330), Raising agent (Sodium bicarbonate INS 500(ii)) Nil N.A. 100.00 9 Me....
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.... (falling under HSN 2106 90) on which the GST liability will be 18% (9% CGST +9% SGST). c) The mixed supply of Instant mix flour of Khaman and masala pack shall be treated as supply of Instant Mix Flour of Khaman (falling under HSN 2106 90) on which the GST liability will be 18% (9% CGST + 9% SGST). 10. For arriving at the aforementioned ruling, the GAAR, gave the below mentioned findings viz: • the reliance on VAT Determination order and the case laws cited by the applicant pertaining to VAT regime does not hold ground since GST classification is based on HSN which was not the case with the Schedule-I of the Gujarat Value Added Tax Act, 2003. • that as far as instant mix flours of Khaman, Gota, Dalwada, Dahiwada and Methi Gota is concerned, inspection revealed that each of the packet is marked Instant Mix'; • the proportion of spices and additives contained in the above products ranges from 5% to 33.4%; that the products contain spices and additives in different proportions not mentioned in the Chapter Heading 11.06 or the relevant Explanatory Notes of HSN; that this is not the case of addition of very small amounts of additiv....
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....fication No. 1/2017-CT (R), is a residuary entry for food preparations; that to qualify as food preparation under HSN 2106, the product by itself should be for use for human consumption; that instant flour mix cannot be directly processed for use but they are first required to be mixed with water, oil, etc & thereafter it is processed for use; • that the essential character of the instant flour mix is flour and not the additives added to it; • that the major component of cost and price of the instant flour mix is flour and price of spices and additives is very negligible; • that by adding water to idli & dhosa mix, these can be prepared as is being prepared from their batter; that therefore the distinction drawn by the AAR is too narrow; • the ruling of the AAR holding the flour to be falling under entry 23 of schedule III of notification No. 1/2017-CT (R), is not correct since these cannot be straight away cooked for preparing food articles for human consumption; • that AAR has erred in classifying instant mix on the grounds that it contains spices. In view of the aforementioned averments, the appellant stated tha....
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.... 100.00 3. Khaman Instant Mix Flour 400gm (including masala pack of 15gm) Bengal Gram (Chana Dal) lodised Salt, Acidity regulator (Citric acid INS 330), Raising agent (Sodium bicarbonate INS 500(ii)) 100.00 N.A. Nil 100.00 3A. Masala Pack 15 gm Raising agent(Sodium bicarbonate INS 500(ii)), 4. Dahiwada Instant Mix Flour 400gm Black Gram (Urad Dal), Green Gram (Moong Dal) lodised Salt, Raising agent (Sodium bicarbonate INS 500(i)), Acidity regulator (Citric acid INS 330) 100.00 N.A. Nil 100.00 5. Dhokla Instant Mix Flour 400gm Black Gram (Urad Dal), Green Gram (Urad Dal) Rice Sugar, lodized Salt, Raising agent(Sodium bicarbonate INS 500(i)), Acidity regulator (Citric acid INS 330) 100.00 N.A. Nil 100.00 13. We have carefully gone through and considered the appeal filed by the appellant, their written/oral submissions and additional submissions made during the course of personal hearing and the impugned ruling dated 19.7.2021. 14. The issue involved in this case is regarding proper classification and determination of rate of tax in respect of the ten items listed in paragraph 3 above. As is alre....
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....) (including whole cobs ground with or without their husks) grain sorghum, rice or buckwheat are classified in this heading as flours if they 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). The heading also covers swelling (pregelatinised) flours which have been heattreated 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 more by weight of cocoa calculated on a totally ....
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....heading 07.14). (b) Prepared foodstuffs known as tapioca (heading 19.03). CBIC circular No. 80/54/2018-GST dated 31.12.2018[relevant extracts] 3. Applicability of GST on Chhatua or Sattu: 3.1 Doubts have been raised regarding applicability of GST on Chhatua (Known as "Sattu" in Hindi Belt). 3.2 Chhatua or Sattu is a mixture of flour of ground pulses and cereals. HSN code 1106 includes the flour, meal and powder made from peas, beans or lentils (dried leguminous vegetables falling under 0713). Such flour improved by the addition of very small amounts of additives continues to be classified under HSN code 1106. If unbranded, it attracts Nil GST (S. No. 78 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017) and if branded and packed it attracts 5% GST (S. No. 59 of schedule I of notification No. 1/2017-Central Taxes (Rate) dated 28.06.2017). 17. The appellant's primary averment is that the essential character of instant mix is flour only and therefore they should fall under HSN 1101, 1102 or 1106 as the case may be and consequently be leviable to GST in terms of schedule I to notification No. 1/2017-CT (R) dated 28.6.2017 @ 5%.....
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....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 1106, 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 other ingredients like Iodised salt, Acidity regulator (INS 330), Raising agent (INS 500(ii)) 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. 19. The appellant has further stated that circular No. 80/54/2018-GST dated 31.12.2018 is applicable to five (5) instant mix flours viz. Idli, Dhosa, Khaman, Dahiwada and Dhokla which contains very small amount of additives and does not contain any spices. The circular is already reproduced supra. The CBIC has clarified in the aforesaid circular that the flour of ground pulses and cereals, improved by the addition....
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....aking powders (self raising flour). Thus, in view of the explanatory notes of the HSN, Instant mix Idli, Dhokla, Dhosa, Handvo and Pizza are excluded from the Chapter Heading 1101 and 11.02. 21. The appellant also contended that Idli instant mix flour and Dhosa instant mix flour classifiable under Entry 100A of Schedule I. This averment of the appellant has already been dealt with in the impugned ruling. Nothing is produced before us, compelling us to interfere with the findings as far as this averment is concerned. 22. The next averment of the appellant is that under the VAT determination order, different varieties of flour have been held to be 'flours' falling under entry 12 in Schedule I to GVAT Act & that since there is no substantial change in schedule entries, classification and interpretation adopted needs to be followed. The applicant has also relied on the judgement in the case of West Coast Waterbase P Ltd and Samsung India Electronics P Ltd, ibid, to substantiate the averment. We note that the averment stands addressed in paragraph 15 of the impugned order dated 19.7.2021. Further we are in agreement with the said findings of GAAR. 23 The appellant has f....
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....o this finding, that the averment of the appellant that entry most beneficial to the appellant needs to be preferred, also stands rejected. 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 1101, 1102 or 1106 of the Customs Tariff Act, 1975. 25. As far as the averment regarding classification of instant Gota mix supplied with chutney powder, Methi gota instant mix supplied with kadhi chutney powder and instant Khaman mix supplied with masala pack, is concerned, the appellant has stated that they are naturally bundled & hence supplied in conjunction with each other & the GST rate applicable to principal supply ie instant mix flour would be applicable. We are in agreement with the findings of GAAR recorded in para 8.3 of the impugned ruling dated 19.7.2021 and hold that it is a mixed supply. 26. 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". The appellants further averment is that it can neither be c....