In re Das & Sons (GST AAR Odisha)
‘Raula Gundi’ to be considered as chewing tobacco (without lime tube) which attracts 28% GST and 160% Compensation Cess
The AAR, Odisha in Das & Sons [Order No. 03/ODISHA-AAR/2022-23, dated November 22, 2022] has held that ‘Raula Gundi’ is nothing but a chewing tobacco (without lime tube) therefore, will be covered under HSN Code ‘2403 9910’ and will attract 28% Goods and Services Tax (“GST”) and 160% Compensation cess.
Facts:
M/s Das & Sons (“the Applicant”) is a manufacturer and supplier of ‘Raula Gundi’ (“the product”) to various Betel shops, grocery shops and tea shops under the cover of GST invoices. The Applicant stated that various raw materials are required for the preparation of the product like tobacco dust, bhaja dhania, madhuri, mala zira, mustard oil, epoil, lime etc. Further, tobacco dust is the predominantly used ingredient which constitutes about 50% of the product.
The Applicant has sought the advance ruling on the classification and applicable tax rate of the product.
The Applicant was of the view that the product is to be classified under HSN Code 2403 9920 and chargeable to 28% GST along with 72% GST Cess under the provisions of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).
Issues:
1. Whether the product ‘Raula Gundi’ is classified under HSN Code 24039920?
2. What is the applicable rate of GST and Cess is chargeable on the product?
Held:
The AAR, Orissa in Order No. 03/ODISHA-AAR/2022-23 held as under:
