In re Nata Nutrico Coconut Food Products Limited Liability Partnership (GST AAR Kerala)
Summary: Kerala Authority for Advance Ruling held that “Nata De Coco (Coconut Jelly)” manufactured by Nata Nutrico Coconut Food Products Limited Liability Partnership is not classifiable under HSN 20079990 as claimed by the applicant but is correctly classifiable under Heading 2106, specifically Tariff Item 21069099.
The applicant manufactures Nata De Coco using coconut water and coconut milk as principal raw materials. Its manufacturing process involves filtration and cooking of coconut water and coconut milk with sugar, followed by addition of Acetobacter xylinum for fermentation for about 14 days.
The resulting raw nata layer is thereafter soaked, cut, cleaned, dried, packed and sold. The applicant contended that the product was a coconut-based jelly and should fall under Heading 2007 covering jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes obtained by cooking, relying also on the Coconut Development Board journal of December 2017. The Authority, however, examined the product’s actual manufacturing process, the General Rules for Interpretation, relevant tariff headings, Section Notes, Chapter Notes and HSN Explanatory Notes. It observed that fruit jellies falling under Heading 2007 are preparations obtained by boiling fruit juices, whether expressed from raw or cooked fruit, with sugar until the product sets on cooling. Nata De Coco, by contrast, is not obtained by boiling or concentrating coconut juice, coconut pulp or fruit pulp so as to form a jelly on cooling. Its jelly-like form results from microbial fermentation and subsequent processing. The Authority further held that the expression “fruit jellies” in Heading 2007 must be read ejusdem generis with jams, marmalades, fruit or nut purées and fruit or nut pastes, and that Nata De Coco did not possess their essential character. It therefore rejected classification under Heading 2007. The Authority next considered Heading 2008, covering fruit, nuts and other edible parts of plants otherwise prepared or preserved, but found that the finished product was not identifiable fruit, nut or edible part of a plant prepared or preserved as such; instead, it was a distinct fermented edible preparation obtained through microbial action. Heading 2008 was consequently also ruled out. With no more specific heading found applicable, the Authority considered residual Heading 2106 for “Food preparations not elsewhere specified or included.
