In re Swastiks Masalas Pickles and Food Products Pvt. Ltd. (GST AAR Karnataka)
i. What is the HSN Code of the product ‘Rava Idli Mix’?
The product Rava Idli Mix merits classification under tariff heading 2106 and attracts 18% GST in terms of entry number 23 of schedule-III to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 .
FULL TEXT OF THE ORDER FOR AUTHORITY OF ADVANCE RULING, KARNATAKA
M/s. Swastiks Masalas Pickles and Food Products Private Limited (herein after referred to as “the applicant”), # 446, Swastiks, 18th Main, 4th T Block, Jayanagar, Bengaluru-560 041 having GSTIN 29AADCS9940B1Z8 have filed an application for Advance Ruling under Section 97 of CGST Act,2017 read with Rule 104 of CGST Rules 2017 and Section 97 of KGST Act, 2017 read with Rule 104 of KGST Rules, 2017, in form GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. The Applicant is a Private Limited Company registered under the provisions of Central Goods and Services Tax Act, 2017 as well as Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST Act respectively). The Applicant is engaged in manufacture of spices, masalas, pickles and food products in the brand name of “SWASTIK”. The applicant, among other things, also manufactures and sells “Rava Idli Mix” under the brand name of SWASTIK, classifying the same under tariff heading 2106 9099, on discharging GST at 18%. However the applicant felt that the said product merits classification under HSN 1106 and hence filed the instant application.
3. The applicant, in view of the above, sought advance ruling in respect of the following question:
a. What is the HSN Code of the product “Rava Idli Mix” ?
4. Admissibility of the application: The question is on the issue of classification of the product “Rava Idli Mix”, which is covered under “classification of any goods or services or both” and hence is admissible under Section 97(2)(a) of the CGST Act 2017.
5. BRIEF FACTS OF THE CASE: The applicant furnishes the following facts relevant to the issue :
5.1 The Applicant stated that they are engaged in manufacture of masalas, pickles 86 other food products and they also manufacture &, market the product “Rava Idli Mix”, which is a mix of flour of cereals / grains along with pulses added with spices 86 condiments. They furnished the process followed by them to manufacture the product “Rava Idli Mix”, which is as under:
a) Purchase food grains and pulses from open market
b) Such cereals/grains 86 pulses are sorted, washed and then sent to grinding machine, where it is grinded into flour.
c) Sometimes, the applicant purchases the flour directly from the vendors.
d) The flours of cereals/grains 86 pulses are mixed in certain proportion added with certain spices. The mixed content is commonly known as “Rava Idli Mix”
e) At the processing unit, the applicant does not carry on any process of cooking, but carries on only mixing process, whereby spices, condiments are mixed with flour of grains, cereals and pulses. Flour of grains, cereals and pulses are used in its primary farm.
f) The product “Rava Idli Mix” is packed in different quantities as per the ‘marketing requirements and distributed through the marketing distribution channel.
g) On the packaging, along with other statutory disclosures, applicant also prints the recipe containing the process of preparing Rava Idli by using the subject product adding certain other ingredients such as sour curds and coriander leaves.
h) Every consumer of the product “Rava Idli Mix” is required to follow the process of mixing and adding such other ingredients later to be cooked before such product can be consumed as eatable.
5.2 The Applicant stated that, on the basis of limited understanding of the classification, they had classified the product “Rava Idli Mix” under chapter 21 with HSN 2106 9090 and have been discharging 18% GST on the said product. Further during the course of detailed examination of classification by independent expert, with the new requirement of compulsory as to HSN, it is understood that the classification under HSN 2106 9090 is not correct and the said product merits classification under HSN 1106 1010.
6. Applicant’s Interpretation of Law : The applicant furnished their interpretation of law with regard to classification of the product “Rava Idli Mix”, which is as under:
6.1 The applicant with regard to coverage of the products under heading 1106 stated as under.
a) Chapter 11 covers the products of milling industry; malt; starches; inulin; wheat gluten as per the harmonized system of nomenclature.
b) Chapter 11 does not cover
i. Roasted malt put up as coffee substitutes (heading 0901r 2101);
ii. Prepared flours, groats, meals or starches of heading 1901;
iii. Corn flakes or other products of heading 1904;
iv. Vegetables, prepared or preserved of heading 2001,2004 or 2005;
v. Pharmaceutical products (chapter 30); or
vi. Starches having the character of perfumery, cosmetic or toilet preparations (chapter 33).
c) Products from the milling of the cereals listed in the table below fall in this chapter if they have, by weight on the dry product:
i. A starch content (determined by the modified Ewers polarimetric method) exceeding that indicated in column (2); and
ii. An ash content (after deduction of any added materials) not exceeding that indicated in column (3). Otherwise, they fall in heading 2302.
However, germ of cereals, whole, rolled, flaked or ground, is always classified in heading 1104.
d) Products falling in this chapter under the above provisions shall be classified in heading 1101 or 1102 if the percentage passing through a woven metal wire cloth sieve with the aperture indicated in column (4) or (5) is not less, by weight, that that shown against the cereal concerned. Otherwise, they fall in heading 1103 or 1104.
