In re Gourmet Popcornica LLP (GST AAR Tamilnadu)
Q1.What would be the accurate HSN code and consequently, the rate off GST applicable on pre-mix popcorn maize packed with edible oil and salt? Whether the same can be classified under HSN Heading 2008 and whether the same shall be chargeable to tax at the rate of 12%?
A1. The pre-mix popcorn maize (com kernels) packed with edible oil and salt supplied by the applicant is classified under CTH 20081990.
A2. If so, whether the said rate of Goods and Services Tax rate of 12% is applicable retrospectively with effect from 1st July 2017?
A2. The applicable the rate of tax is CGST @6% as per SI No 40 of Schedule II of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 and SGST @6% as per SI No 40 of Schedule II of Notification No. II (2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 with effect from 1.7.2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, TAMILNADU
Note: Any appeal against this Advance Ruling order shall lie before the Tamil Nadu State Appellate Authority for Advance Rulings, Chennai as under Sub-Section (1) of CGST Act / TNGST Act 2017, within 30 days from the date on the ruling sought to be appealed is communicated.
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
M/s GOURMET POPCORNICA LLP, No.15/8, Baliah Avenue, Mylapore, Chennai-600006 (hereinafter referred as the applicant) is a limited liability partnership firm, registered under the GST Act 2017 vide GSTIN No. 33AANFG4672P1ZR. The Applicant has sought Advance Ruling on the following question:-
i. What would be the accurate HSN code and consequently, the rate off GST applicable on pre-mix popcorn maize packed with edible oil and salt? Whether the same can be classified under HSN Heading2008 and whether the same shall be chargeable to tax at the rate of 12%.
ii. If so, whether the said rate of Goods and Services Tax rate of 12% is applicable retrospectively with effect from 1st July 2017.
The applicant submitted a copy of challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017.
2.1 The applicant have stated that they are engaged in the business of processing, packaging of maize corn together with commodities such as flavoring, seasoning. The applicant is primarily engaged in importing/procuring popcorn maize which undergoes fumigation and cleaning and other related processes. This processed popcorn maize is sold along with edible oil and salt and this mixture is then commercially sold as pre-mix ready to cook popcorn. They have stated that they primarily deal with supply of premium popcorn maize which comprises of Maize(corn), Edible oil and flavor salt, all packed together in pouches of carried sizes. The applicant is classifying the pre-mix popcorn packets under HSN 2106 9909 and charging GST at the rate of 18%.
2.2 The applicant has made reference to HSN 2106 and 2008. They have reiterated that the product being dealt with is a mixture of the products mentioned in HSN 2106 and 2008. Namely popcorn maize is mixed with oil and flavor salt and sold and marketed to customers as pop-corn pre-mix under the brand name registered with the applicant. They have stated that maize is a cereal plant that yields large grains (corn or sweet corn).; Maize is a leafy stalk whose kernels have seeds inside.; It is an angiosperm, which means that its seeds are enclosed inside a fruit or shell.; In the processing of maize, these seeds are shaken loose and driedto essentially make them durable and transportable. They have stated that considering the general understanding of the classification of maize as a cereal and how the maize cereals are grown, the maize can be considered to be essentially a part of a plant which is dislodged in the regular process of harvesting the crop. The popcorn maize is nothing but a plant and the same are grown in fields. it is the kernel of maize, which is used as sweet com or popcorn.
2.3 HSN 2008 clearly provtdes for “other edible parts of plants otherwise prepared or preserved” and their product pop-corn pre-mix essential maize corn kernal which is part of a plant They have also stated that maize corn kernel is prepared by way of applying the oil and salt seasoning premix along with items such as beta carotene and turmeric. This results in a manufactured end product that is commercially sold as a pop-corn pre-mix. In view of the aforesaid facts, the applicant is of the view that the nature and extent of activity undertaken by them would be manfacture of pop-corn pre-mix, however the basic component is a part of a plant and this would merit appropriate classification under HSN 2008 and attract GST at 12%. They have also made reference to the ruling issued by Maharashtra AAR in the case of M/s SHAH NANJI NAGSI EXPORTS PRIVATE LIMITED wherein it is ruled that the pre-mix popcorn falls under the 2008 19 90 and attracts GST @12%. The applicant has also stated that they shold be entitled to a retrospective classification under Chapter 2008 and the tax so paid in excess should be refunded which would in turn be passed to their customers.
3. The appltcant was given an opportunity to be personally heard on 26 09 2019. The applicant appeared before the authority and stated that the produces Maize corn which they are importing after fumigation and processing at low temperature and humidity. They undertook to submit detailed manufacturing process with the details of ingredients for each of the varieties of pre-mix. The main ingredients in all are oil and salt and preservatives apart from maize corn. They stated that there is a Central Excise ruling in respect of a different company where pre-mix was classified under HSN 2008. They stated that they have been classifying their product under HSN 2106 since 2015. They also stated that they will submit the required documents along with FSSAI for each product in 2 weeks.
4.1 As undertook during the Personal Hearing, the applicant filed the following additional submissions on 18.10.2019.
i. List of end products dealt by the company
