In re Foods and Inns Limited (GST AAR Andhra Pradesh)
Question: Can the Mango Pulp/puree be treated as fresh fruit and exemption be claimed on it? If not whether the mango pulp/puree falls under the heading 20079910 or 0804 or 2008?
Answer: Negative.
Question: What is the rate of tax payable on outward supplies of Mango fruit pulp/puree under the GST Act?
Answer: ‘Mango pulp/puree’, falls under the entry no. 453 of Schedule-III of Notification No.1/2017-Central Tax (Rate), dated 28.06.2017 attracting the tax rate of 18%
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING,ANDHRA PRADESH
(Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub- section (4) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017)
1. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and SGST Act, 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the APGST Act.
2. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s. Foods and Inns Limited (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017.
3. Brief Facts of the case:
3.1 M/s. Foods and Inns Limited is a public limited Company and are engaged in the business of supplying of mango pulp/puree to the dealers situated in India, including merchant export.
3.2 The Manufacturing process of Mango pulp:
The applicant states that selected varieties of fresh mango fruits are procured and transported to the fruit processing plant. The fruits are inspected, graded and washed and sent to the controlled ripening chambers. The fully ripened mango fruits are then washed, blanched, pulped, deseeded, centrifuged, homogenized, and thermally processed. The preparation process includes cutting, de-stoning, refining and packing. The refined pulp is packed in cans, hermetically sealed and retorted. The applicant claims, this process ensures the retention of the natural flavor and aroma of the fruit in the final product. Main varieties of Mango Pulp are Alphonso Mango Pulp, Totapuri Mango Pulp, Kesar Mango Pulp etc. Such extracted Mango Pulp/puree is sold in India, including Merchant Exporters.
3.3 . The applicant submits that the product in question is called ‘pulp’ in some countries and ‘puree’ in some other countries. Mango Pulp is perfectly suited for conversion into juices, nectars, drinks, jams, fruit cheese and various other kinds of beverages besides its direct consumption in lieu of fresh fruit. It can also be used in puddings, bakery fillings, fruit meals for children and flavors for food industry, and also to make the most delicious ice creams, yoghurt and confectionery.
4. Questions raised before the authority:
i. Can the Mango Pulp/puree be treated as fresh fruit and exemption be claimed on it? If not whether the mango pulp/puree falls under the heading 20079910 or 0804 or 2008?
ii. What is the rate of tax payable on outward supplies of Mango fruit pulp/puree under the GST Act?
On Verification of basic information of the applicant, it is observed that the applicant is under Centre jurisdiction, i.e. Superintendent Chittoor-2 Range, Tirupati CGST Division. Accordingly, the application has been forwarded to the jurisdictional officers and a copy marked to the State Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017.
Remarks were received from Central Tax officers concerned stating that no proceedings were lying pending or passed relating to the applicant on the issue, for which the Advance Ruling was sought by the applicant.
5. Applicant’s Interpretation of Law:
5.1 . The applicant admits that while exporting the mango pulp/puree the Customs Authority treats it under HSN code 20079910. But, the applicant claims that mango pulp/puree is nothing but fresh fruit, hence they are not liable to pay tax on outward supplies. The above process converting fruit into pulp /puree increases only shelf life of the product. In this regard the applicant relies on the decision reported in 10APSTJ page 219 and submits that the same was also affirmed by Honorable Andhra Pradesh High Court reported in 24APSTJ page 113.
5.2 The Applicant submits that as per the Explanation at the end of the Notification No.1/2017-Central Tax(Rate), dated 28.06.2017 which inter alia provides-“Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of the notification. Therefore, it is implied by virtue of above explanation, the classification of goods has to be done in accordance with Customs Tariff Act 1975 under which the goods being dealt by the applicant are treated to be falling under HSN Code 20079910. Under the said notification Heading 2007 is provided against SI.No.39 and no sub-heading/tariff item were provided like in the case of most of the other goods notified there under. The applicant submits that as per the General Rules of interpretation, when the goods are described against the Heading containing 4 digits all the sub-headings and tariff items would be comprehended under such entry. Once the heading/tariff item is recognized, the rate of GST would be governed by the said notification.
5.3 The applicant further submits that according to the notes furnished in Chapter 20 of the Customs Tariff Act, 1975 for the purposes of heading 2007, the expression “obtained by cooking” means obtained by heat treatment at atmospheric pressure or under reduced pressure to increase the viscosity of a product through reduction of water content or other means. Therefore, even if it is presumed without admitting, if at all if the mango pulp/puree is not treated as fresh fruit then it falls under HSN Code 20079910. The entry 20079910 reads as under.
