In re Tulsiram Food Products (GST AAR Uttar Pradesh)
Q-1 What will be the Applicable CGST & SGST Tax rate on the final products namely ‘Namkeen’ in the circumstances after fulfilling the condition of affidavit for disclaimer, use of unregistered brand, name, symbols etc and use of such disclaimer in the final products ?
Ans- 1 If the Applicant Voluntarily forego their actionable claim or enforceable right on brand name on the final products namely “Namkeen” in the manner as prescribed under the Notification 1/2017 C.T. (Rate) dt. 28.06.2017 THE APPLICABLE RATE of Central Tax and State Tax would be 2.5% each (cumulative 5%).
Q-2 What will be CSH/HSN code alongwith Applicable Tax rate of the final products namely “Extruded raw Stick”?
Ans- The CSH/HSN code of the final products namely “Extruded raw Stick” is 21069099 Attracting rate of tax @ 9% each under Central and State Tax (cumulative 18%).
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, UTTAR PRADESH
ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 & UNDER SECTION 98(4) OF THE UPGST ACT, 2017
1. M/s Tulsiram Food Products, Khasra No. 3279, Near Nadarganj, Ancillary Estate, Amausi, Lucknow-226008, (here in after referred to as the applicant) is a registered assessee under GST having GSTN: 09AAPFT2102F1 ZB.
2. The applicant is engaged in manufacturing and supply of “Namkeen” duly sealed & packed in printed pouches containing the details of the manufacturer. The applicant also plans to manufacture and sell raw extruded stick (when fried becomes similar to kurkure) out of com, rice grits etc.
3. The applicant has submitted application for Advance Ruling dated 15.09.2020 enclosing dully filled Form ARA-01 (the application form for Advance Ruling) along with annexure and attachments. The applicant in his application has sought advance ruling on following questions-
1. What will be the applicable CGST & SGST Tax rate on the final product namely “Namkeen” in the circumstances after fulfilling the condition of affidavit for disclaimer, use of unregistered brand, name, symbol etc and use of such disclaimer in the final product?
2. What will be CSH/HSN Code alongwith applicable Tax rate of the final product namely “Extruded raw stick”?
4. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant.
5. The applicant has submitted that-
(i) They are a manufacturer of “Namkeen” (HSN Code:210690) which is sold in printed pouches of MRP normally varying from Rs. 1/- to Rs. 5/-. The principal ingredients of “Namkeen” (packed in sealed pouch) are normally processed besan/matar aataa/rice aataa/com grit/rice grit/maida, edible oil, spices etc. Such Final products are ready to eat. The said printed pouches contain the details of the manufacturer viz name & address of the manufacturer and unregistered brand name. At present they are billing Namkeen @ 12% GST (6%-CGST & 6%-SGST) without any disclaimer. Presently they are unable to complete/survive in the market on payment of 12% GST.
(ii) Now they are in the process of introducing disclaimer on each retail pack to the effect that they will voluntarily forego any actionable claim or enforcement right in respect of brand name printed on the product. Further, they shall not be using any registered trademark, any registered brand name, registered symbol etc under copyright act or any other act in reference to their aforesaid products. They are ready to give relevant affidavit to the Commissioner, CGST, Lucknow in this regard. In these circumstances they feel that the benefit of notification 34/2017 Central Tax (rate) dated 13.10.2017 can be taken by them.
(iii) Besides above they are planning to manufacture and sell raw extruded stick (when fried becomes similar to kurkure) out of com, rice grits etc. The process of manufacture of the said product is as under:-
(a) Grit of Com, rice etc are mixed together with water and fed in an batch mixture.
(b) The mixer is then fed in an extruder which delivers extruded sticks.
(c) Such sticks will be packed in pack of 10 or 15 Kg loose bags without any brand but containing the details of the (viz name & address) manufacturer. The applicant also annexed photograph of the said extmded sticks.
(iv) The applicant has requested to take reference of the Order No. 36 of Authority for Advance Ruling Lucknow dated 05.08.2020 in case of M/s Atul Kumar Rajpal and also take reference of GST Circular No. 02/2017 issued under F.No. F17(1234)ACCT/GST/2017/2627 dated 29.09.17 issued by Commissioner, State Tax, Jaipur, Rajasthan.
6. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer their comments/views/verification report on the matter. The Deputy Commissioner, CGST & Central Excise Division Lucknow I, Lucknow vide her letter C.No.CGST/Lko/Tech/Misc(23/l 0/2019)/10694 dated 02.12.2020 submitted that:-
(a) If the applicant voluntarily forgoes brand name, the applicable rate on the final product Namkeen will be 5% (2.5% CGST & 2.5% SGST).
(b) The final product ‘extruded raw sticks’ will fall under category of Namkeen under HSN code 210690 and Tax rate of 12% will be applicable if sold under brand name a rate of 5% without brand name. She has also informed that no such proceedings are pending for decision as on date.
7. The applicant was granted a personal hearing on 04.12.2020 which was attended by Shri Loveish Shahdadpuri (Partner) and Shri Pushkar Raj Jotwani (Authorized Representative )during which they reiterated the submissions made in the application of advance ruling.
DISCUSSION AND FINDING
8. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the ‘CGST Act’.
9. We have gone through the submissions made by the applicant and have examined the explanation submitted by them. At the outset, we find that the issue raised in the application is squarely covered under Section 97(2)(a),(b)&(e) of the CGST Act 2017 being a matter related to classification of goods, applicability of a notification and determination of the liability to pay tax on any goods. We therefore, admit the application for consideration on merits.
10. The applicant in his application submitted that they manufacture and sell ” Namkeen” duly sealed & packed in printed pouch containing the details of the manufacturer. Pack is the retail pack which is ultimately sold to the final consumer. Further, they do not have any registered trademark or registered brand name or registered symbol (under copyright act). Hence no trademark or registered brand name or registered symbol shall be printed on the retail pouch of the final product i.e. “Namkeen”. Also no such brand name or trademark or symbol shall be printed on the wholesale pack. MRP of such product varies from Rs. 1/- to Rs. 5/-. The applicant also plans to manufacture and sell raw extruded stick (when fried becomes similar to kurkure). Such sticks will be packed in pack of 10 or 15 Kg loose bags without any brand but containing the details of the (viz name & address) of manufacturer. The ingredients as per applicant of the “Namkeen” (packed in sealed pouch) is processed besan/matar aataa/rice aataa/corn grit/maida, edible oil, spices etc and the ingredients of extruded raw stick will be com, rice grits.
11. Now, coming to the first question raised by the applicant regarding applicable CGST & SGST Tax rate on the final product namely “Namkeen” in the circumstances after fulfilling the condition of affidavit for disclaimer, use of unregistered brand, name, symbol etc and use of such disclaimer in the final product, we find that schedule I of the Notification 1/2017 C.T. (Rate) dt. 28.06.2017 contains list of goods attracting 2.5% rate of Central. Tax and SI. No. 101A of the schedule I (inserted by notification 34/2017 Central Tax (rate) dated 13.10.2017 reads as under-
