In re Kitchen Express Overseas Ltd. (GST AAR Gujarat)
The products i.e. Gota Flour ii. Khaman Flour iii. Dalwada Flour iv. Dahiwada Flour v. Dhokla Flour vi. Idli Flour and vii. Dosa Flour are classifiable under HSN. 2106 90 (Others) attracting 18% GST (9% CGST + 9% SGST) as per Sl. No. 23 of Schedule-III to the Notification No.01/2017-Central Tax (Rate) dated 28-6-2017. Also Read: AAAR Gujarat ruling on classification of Various Mix & Instant Mix flour
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
A. BRIEF FACTS
The applicant is a supplier of Pulses, Flours, Namkeen, Mix Flours and other food products including Khaman Flour, Gota Flour, Dalwada Flour, Dahiwada Flour, Dhokla Flour, Idli Flour and Dosa Flour, supplied in a unit container under the registered brand name of ‘KITCHEN XPRESS’. These flours are in the form of instant mix of flour of grains, which is then used to prepare instant farsan and other similar dishes by following the directions of the recipe after adding such other ingredients as required.
2. As per applicant, the different varieties of said Flours manufactured and supplied by them fall under HSN 1102, which reads as:
“HSN 1102:
Cereal flours other than of wheat or meslin i.e. maize (corn) flour, Rye flour, etc. put up in unit container and,-
(a) bearing a registered brand name; or
(b) bearing a brand name on which an actionable claim or enforceable right in a Court of Law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone, subject to the conditions as in the ANNEXURE].”
3. The applicant submits as follows: The composition and ingredients contained in the different types of Flours is submitted which clearly reveals that it does not contain maize flour or wheat flour. The products as mentioned as above are nothing but flours. The applicant also supplies a small pack of masala (spices) necessary to prepare a particular food item from that flour. But that does not make any difference in the main product. The small pack of masala is placed in the packet of flour for the convenience of the customer. So as per understanding of the applicant, the flour manufactured and sold by it fall under HSN 1102 and, hence, taxable at 2.5% CGST + 2.5% SGST.
4. Thus, considering the overall facts and circumstances of the case vis-a-vis the entries in question, the applicant submitted that Flours of different varieties as stated above, are eligible to be classified under the Tariff Heading No.1102 as “Cereal Flours other than wheat and maize” and, thus, attract GST at 2.5% CGST + 2.5% SGST i.e. 5%GST.
Question on which Advance Ruling sought
5. Under which Chapter, Tariff Heading and HSN, the different varieties of Flours i.e. Gota Flour, Khaman Flour, Dalwada Flour, Dahiwada Flour, Dhokla Flour, Idli Flour and Dosa Flour manufactured and supplied by applicant will attract CGST/SGST?
6. The applicant, vide their additional submission dated 16-8-20, further submitted that the following process is followed for manufacturing & selling of the products:
(a) Company purchases food grains and pulses from open market.
(b) Such pulses are sorted and cleaned and then send to grinding machine.
(c) Pulses are grinded into flour in grinding machine for e.g. where Grams is purchased, it results into gram flour by following grinding process. In certain cases, the applicant purchases grinded flour directly from the vendors.
(d) Now, certain spices are mixed in flour and such mixed flour is packed in various packings.
(e) At last, a small packet of spices necessary to prepare food item is supplied in pouch with packing of flour for added taste.
(f) Mixed flour (commercially known as ‘Instant Mix Flour’) are sold in open market or through distributors to consumers.
(g) End consumer of such instant mix flour is required to follow certain food preparation process before such product can be consumed as etable.
(h) Hence, instant mix flour cannot be consumed as it is, but it is required to follow certain cooking procedures before consumption. Thus, the product manufactured and sold by the applicant is not ‘ready to eat’ but can be said as ‘ready to cook’.
7. The applicant further submitted that they were registered under Gujarat VAT and had obtained the determination from the Gujarat VAT Authority vide Determination Order No. 2010/D/171-177/No.356-359 dated 12.08.2010 passed u/s 80 of the Gujarat Value Added Tax Act, 2003 in applicant’s own case (copy annexed with this application) and by virtue of this order, applicant was paying the VAT considering above products under the entry no. 12 (ii) of the Schedule I to the GVAT Act, 2003, which was tax free in the VAT regime. All the items covered in such order are continuously in the similar form and composition are continued in the GST regime.
8. The applicant further submitted that the confusion has been arisen for applicability of tariff to the products mentioned in the application i.e. Khaman Flour, Gota Flour, Dahiwada Flour, Dalwada Flour, Dhokla Flour, Idli Flour and Dosa Flour in which HS code these items fall and at which rate GST should be charged on it and, therefore, this application was made.
9. The applicant submitted the details of raw materials used in various products as follows:
