In re Sevencia Fromage & Dairy India Pvt. Ltd. (GST AAR Uttar Pradesh)
Question: Whether the product ‘Breaded Cheese’ (impugned goods) is classifiable as ‘cheese’ under Heading 0406, and accordingly, subject to CGST and SGST at the rate of 6% each under S.N. 13 of the Schedule-II appended to notification No. 1/2017- Central Tax (Rate) dated June 28, 2017 (Notification No. 1/2017 – CT(R’)) and Notification KANI.-2-836/xi-9(47)/17-UP. Act-1-2017-Order- (06)-2017 dated June 30, 2017(Notification No. 836/17’) respectively?
Answer: We find from the label/packaging of the goods that the percentage of cheese is not more than 55%, which indicates that though cheese is the major component of the goods but it cannot be said to be present in such quantity that it predominates or overwhelms the presence of other ingredients. It is observed that the percentage of other ingredients is as high as 45%, which should prevent the goods from retaining the character of cheese. Therefore acceptance of these goods as cheese would not be the correct position.
The applicant has produced certain rulings of U.S. Customs in favor of classification under heading 0406 but in our opinion, since the conditions prevailing in both the countries are vastly different and it is also not clear that the goods under consideration before the U.S. Customs were identical to the instant goods, we are unable to apply the ratio of these rulings. Since, the cheese balls themselves are not specified in the tariff and they are admittedly a food preparation, hence they are classifiable as ‘Food preparations not elsewhere specified or included’ under heading No. 2106.
In view of the above, “Cheese Balls’ under reference are classified under Schedule III of GST Laws, vide heading 2106 as ‘Food preparations not elsewhere specified or included’ and taxable @ 18% GST (9%CGST + 9% SGST).
Also Read AAAR Order- Breaded Cheese classifiable under Heading 0406; 12% GST applicable
