Case Law Details
In re Ms. Subramani Sumathi (GST AAR Tamilnadu)
What is the rate of tax for the vadams made of maida and what is the HSN Code’
The issue to be decided before us is the rate of tax applicable to the product of the Applicant and the applicable HSN Code. From the various submissions of the Applicant, it is evident that the product is made out of dough of maida as main ingredient along with preservatives. The mixed dough is cut into desirable shapes and dried in oven. The Applicant uses machinery for making the same. The products are sold by the Applicant in retail packing which have s shelf life of around 6 months as they have added preservatives are not fully cooked and are not ready to eat. On purchase byte consumer, they are to be fried in edible oil before consumption. It is seen from the samples and photographs produced during the hearing, that the items are indeed edible only after frying in oil which is not done by the Applicant but those who purchase it.
Therefore, the short point to be decided is whether the product in question is ‘Papad’ falling under Ch. 1905 or a ‘namkeen’ falling under Ch. 2106.
It is seen that Chapter 21 only covers edible preparations and “Namkeens” which are ready to eat are covered under the same. In the instant case, Maida vadam/papads are made of Maida, Sugar and Vanaspathi , Edible Salt, preservatives and dried in oven. They become edible only after frying in oil which is done by the ultimate consumer and the Applicant only supplies the dried/semi -cooked version of it. Hence, they are not covered under Chapter 21. Papad is specifically specified under 1905 05 40 and papad are preparations of various flours or lentils which are dried, traditionally in the sun or made by machinery in commercial scale. They are not edible as such and the final consumer has to fry in oil before making them edible. This is the case in respect of the goods supplied by the Applicant too. Therefore, the product is to be classified under 1905 05 40.
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