TaxTMI 
TaxTMI 
2026 (9) TMI 1565
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....a reference to the corresponding provisions of the KSGST Act, Rules and the Notifications issued thereunder. 3. The facts of the issue: The applicant is engaged in the manufacture and sale of Nata De Coco (Coconut Jelly), a processed food product derived from coconut water and coconut milk. The manufacturing process involves filtration and cooking of coconut water and coconut milk with sugar, followed by the addition of Acetobacter xylinum for fermentation for a period of about 14 days. Thereafter, the product undergoes further processing such as soaking, cutting, cleaning, drying, and packing. A detailed production flow chart was furnished by the applicant. The applicant has been classifying the said product under HSN Code 20079990 and discharging Goods and Services Tax at the rate of 12%. The applicant has filed the present application seeking an advance ruling on the classification of the said product and the applicable rate of tax thereon under the GST law. 4. Submissions/contentions of the applicant: 4.1. The applicant submits that Nata De Coco (Coconut Jelly) is manufactured using coconut water and coconut milk as the principal raw materials through a process involvi....
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.... The Jurisdictional officer (State Tax Officer) Taxpayer Services Circle, Kannur South) submitted specific remarks regarding classification of the product. However the officer has not reported any pending or completed proceedings against the applicant in that office regarding the subject case. 6. Personal Hearing: The applicant was granted an opportunity for personal hearing on 05.01.2026. Shri.Shimwas Hussain, Designated Partner of M/s. Nata Nutrico, appeared on behalf of the applicant and represented the case. During the hearing, he explained the nature of the activities undertaken by the applicant and reiterated the submissions and contentions made in the written application. 7. Discussion and Findings: 7.1. On review of the application, facts, and hearing submissions, it is found that the questions fall under Section 97(2)(a) and (e) of the CGST Act, relating to classification of goods and tax liability determination. The application is therefore admitted for consideration on merits. 7.2. We have carefully examined the facts of the case, the manufacturing process of "Nata De Coco", the submissions made by the applicant, and the applicable provisions of the GST Ta....
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....ter/sugar/citric acid/preservative and finally packed. Thus, the jelly-like product is not the result of the conventional cooking and setting process contemplated under Heading 2007, but is the result of microbial fermentation and subsequent processing. Further, the expression "fruit jellies" in Heading 2007 has to be read ejusdem generis with the other products mentioned in the heading, namely jams, marmalades, fruit or nut purées and fruit or nut pastes. These products are preparations where the fruit or nut remains the essential ingredient and gives the product its essential character. In Nata De Coco, coconut water/milk is used as a medium/substrate in the fermentation process, and the final product is a distinct fermented edible preparation. It is not marketed or consumed as a jam, marmalade, fruit purée, nut purée, fruit paste or nut paste. Therefore, the product does not satisfy the description of goods covered under Heading 2007. Classification under the tariff is to be determined in terms of the heading description read with the relevant Section Notes, Chapter Notes, HSN Explanatory Notes and the General Rules for Interpretation. Commercial descr....
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....cturing process does not show that coconut kernel, coconut pulp, coconut pieces, coconut milk or coconut water are merely prepared or preserved as such. Coconut water and coconut milk are used only as the initial substrate/medium, which is subjected to cooking, pH adjustment and microbial fermentation by addition of Acetobacter xylinum, resulting in the formation of raw Nata De Coco, followed by further processing, cutting, cleaning, cooking and packing. The finished product is therefore not an identifiable fruit, nut or edible part of a plant prepared or preserved as such, but a distinct fermented edible preparation obtained through microbial action. In these circumstances, the essential condition for classification under Heading 2008 is not satisfied, and therefore classification of Nata De Coco under Chapter 20 cannot be sustained. 7.6. No more specific heading has been brought to notice or is found applicable on the facts placed before us. Accordingly, the residual heading 2106 is attracted. Chapter 21 of the GST Tariff covers miscellaneous edible preparations. Heading 2106 is a residual heading covering "food preparations not elsewhere specified or included". 7.7. The re....
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....Rate) dated 28.06.2017. 7.11. "Nata de Coco" is an edible food product obtained through microbial fermentation, resulting in a bacterial cellulose matrix intended for human consumption. As discussed in the findings, the product is classifiable under Heading 2106 as a food preparation not elsewhere specified or included. On examining Notification No. 1/2017-Central Tax (Rate), dated 28.06.2017, as amended from time to time, it is observed that goods falling under Heading 2106 are covered under different entries attracting different rates of tax. At first glance, SI. No. 9 of Schedule IV appears to merit consideration, as it covers "Food preparations not elsewhere specified or included", which is also the description of Heading 2106. However, the entry does not merely adopt the tariff heading; it further restricts its scope by specifying "i.e. Protein concentrates and textured protein substances, Sugar-syrups containing added flavouring or colouring matter, not elsewhere specified or included; lactose syrup; glucose syrup and maltodextrine syrup; Compound preparations for making non-alcoholic beverages; Food flavouring material; Churna for pan; Custard powder." Thus, the applic....
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....bmissions and documents placed on record do not clearly establish whether the product, in the form in which it is supplied by the applicant, is a ready-to-eat packaged food intended for direct consumption without requiring any further preparation. In the absence of sufficient material in this regard, no conclusive finding can be recorded as to whether the product answers the description of "ready to eat packaged food" occurring in SI. No. 23 of Schedule III. 7.13. Nevertheless, if the product is supplied as a ready-to-eat packaged food, it would appropriately fall under SI. No. 23 of Schedule III. If, on the other hand, the product is not supplied as a ready-to-eat packaged food, it would fall under the residual entry at SI. No. 453 of Schedule III, namely, "Any Chapter - Goods which are not specified in Schedule I, II, IV, V or VI." Since both SI. No. 23 and SI. No. 453 of Schedule III attract GST at the rate of 18%, the applicable rate of GST on Nata De Coco for the period from 01.07.2017 to 21.09.2025 remains 18%, i.e., 9% CGST and 9% SGST. 7.14. With effect from 22.09.2025, Notification No. 9/2025-Central Tax (Rate), dated 17.09.2025, came into force in supersession of No....