In re Brindavan Agrotech Private Limited (GST AAR Chhattisgarh)
GST Advance Ruling (AAR) issued for Brindavan Agrotech Private Limited regarding the HSN classification and tax rate applicable to their Fortified Rice Kernels (FRK) focuses on the process of fortifying rice and examines the classification under the Customs Tariff Act, Chapters 11 and 19, along with relevant GST notifications.
The AAR considers the process of converting rice into rice flour, blending it with vitamins and minerals, and extruding the mixture to form pellets of blended fortified rice flour (FRK). The applicant argues that FRK falls under Chapter 1103 of the Customs Tariff Act. However, the AAR notes that the process of fortifying rice involves additional steps beyond milling, and corn flakes or other products of heading 1904 are explicitly excluded from Chapter 11.
Upon analyzing Chapter 19 of the Customs Tariff Act, the AAR concludes that Fortified Rice Kernels (FRK) should be classified under Tariff Item 1904. The AAR refers to Chapter Note 4 of Chapter 19, which states that goods prepared or processed beyond the scope of Chapters 10 and 11 fall under Heading 1904.
Furthermore, the AAR highlights the 45th GST Council meeting’s recommendation to lower the GST rate on Fortified Rice Kernels. The meeting proposed reducing the rate from 18% to 5% for schemes like ICDS. This recommendation, along with subsequent notifications, supports the classification of FRK under Chapter 19.
Conclusion: In conclusion, the GST AAR ruling for Brindavan Agrotech Private Limited states that:
