AI Drafter 
TaxTMI 
TaxTMI 
2025 (5) TMI 982
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....ayla Road, Jaisinghpura Khor, JAIPUR-302027, Rajasthan (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97 (2) given as under: (a) classification of goods and/or services or both A. SUBMISSION OF THE APPLICANT (in brief) :- Brief facts of the case: • The applicant states that he is intending to start the business of trading-purchase and sale of Ground Nuts with shell. The applicant will purchase/source ground nuts from farmers (mandi) and then sell/supply it on order to various firm inter-state and intra-state. • Ground nut is the 'King of Oil seeds' because of its high nutritional values containing proteins, oil, carbohydrate and calorific value. It is grown in Kharif and Rabi seasons of India and India is the second largest Ground Nut producing country followed by China. • Moisture content is a fundamental characteristic of Ground Nut. There are strict moisture content requirements for Ground Nut production. For harvesting, processing, or storage, the moisture content of Ground Nut must be within a particular range. Groun....
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....mmodity and output commodity is exactly similar/same. To make it more illustrable, it can be stated that if the commodity dealt by the applicant is to be consumed directly at the source itself, there is no need of such practice by the applicant, it is only to increase the duration for which the Ground Nuts can be conserved in their original form so that they can be transported from their source to the destination. • The distinguishing element between drying with heat and roasting or cooking can also be understood as, the process of drying involves heat treatment ranging from 10-90 degrees Celsius while the process of roasting or cooking involves use of excess or very high heat treatment ranging much above 100 degrees Celsius that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a slightly charred (darkened) physical appearance. Therefore, drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process. • That the present Application for Advance Ruling is preferred inter-alia on following grounds: GROUNDS: ....
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.... the Circular is reproduced as under : "Representations have been received seeking clarification in respect of applicable GST rates on the following items : (i) Classification of leguminous vegetables such as grams when subjected to mild heat treatment 2. The issue wise clarifications are discussed below : 3. Classification of leguminous vegetables when subject to mild heat treatment (parching) : 3.1 Doubts have been raised whether mild heat treatment of leguminous vegetables (such as gram) would lead to change in classification. 3.2 Dried leguminous vegetables are classified under HS Code 0713. As per the explanatory memorandum to the HS 2017, the Heading 0713 covers leguminous vegetables of Heading 0708 which have been dried, and shelled, of a kind used for human or animal consumption (e.g., peas, chickpeas etc.). They may have undergone moderate heat treatment designed mainly to ensure better preservation by inactivating the enzymes (the peroxidases in particular) and eliminating part of the moisture. 3.3 Thus, it is clarified that such leguminous vegetables which are subjected to mere heat treatment for removing moi....
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....ts main use is masticatory - It is produced from de-husked and sun-dried raw betel nut roasted in firewood/palm kernel based ovens at 130-150 degrees Celsius and then is cooled at room temperature - Roasting and cooling cycle is repeated till desired quality is obtained, changing physical and chemical characteristics of nuts in respect of tannin and arecoline content - Ash-like substance is deposited on outer surface of betel nut - Visual comparison indicates that roasted supari is dark grey in colour while normal supari is brown in colour - HELD: Explanatory note to Heading 0802 of Customs Tariff Act, 1975 is satisfied as main uses of nuts is masticatory - Processes mentioned in Chapter 8ibid do not cover roasting, which is different from moderate heat treatment as well as dehydration - Hence, roasted betel nuts do not satisfy Note 3 to Chapter 8 ibid and is not classifiable under chapter 8 of Tariff - Roasting of betel nut constitutes 'preparation' - Roasted betel nuts are classifiable under Heading No. 2008 ibid, more specifically under Sub-heading 2008 19 20, as they are specifically mentioned in this heading and they are not excluded by any chapter note or explanatory note fro....
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....on by mild heating). As per point no. 6 of application, the taxable person states that "The groundnuts sourced by the applicant shall be subjected to 5% GST rate under chapter 12 of the GST Tariff Act 2017 and seeks to sale them further at the same rate of GST. But in the last of application, in PRAYER, the taxable person prays the hon'ble authority as follows :- " It is therefore, prayed that in light of the above made submission, the commodity to be traded by the applicant i.e. groundnut with shell (procurement from farms and supply after dehydration by mild heating), to be held as goods falling under chapter heading 12, tariff item 1202 attracting NIL rate of GST. Thus, from the applicable tax-rate point of view, it appears that the applicant made contradictory statements in the application. 3. As per application, the taxable person wants to reduce water content by mild heating process. Here it appears necessary to understand some terms like drying, heating, roasting and cooking. Normally drying appears to be sun-drying or air-drying in Agri-sector. Sun-drying and Air-drying is a natural process. Drying also carried out artificially or mechanically using heat treatment ....
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....ical and physical changes in the structure and composition of the Ground Nuts. The heating is essential in order to ensure that the Ground Nuts are retained in their original/raw form only even after transportation and are delivered without spoilage and degradation. 5) We observe that the taxable person wants to reduce water content of ground nuts by mild heating process. The terminologies related to mild heating are drying, heating, roasting and cooking. Normally drying relates to be sun- drying or air-drying in Agri-sector. Sun-drying and Air-drying is a natural process. Drying also carried out artificially or mechanically using heat treatment which can be termed as heating. Mild heating or roasting has a minor difference based on intensity of heat. Thus, drying, heating, roasting and cooking are gradually more intense than former. 6) We observe that heating holds close proximity with roasting. Further, we find that the applicant has not mentioned the details of the heating process to be adopted by him. He has not mentioned details of equipments etc. that will be used to heat ground nuts in order to remove moisture in a controlled way by maintaining adequate temperature. We....