18% GST on ‘Momylac’ Milk Food & Milk for Babies: AAR Rajasthan

In re Bebymil International Private Limited (GST AAR Rajasthan)

Bebymil International Private Limited, based in Rajasthan, sought an advance ruling regarding the GST classification and applicable tax rates for its product range, particularly “Momylac” infant milk formula.

Applicant’s Profile and Product Range:

• Bebymil International Pvt. Ltd. is a company registered under the Companies Act, 2013, engaged in manufacturing infant milk formula, infant cereals, and protein supplements for children and adults.
• The company’s product portfolio includes a wide range of infant nutrition products, such as Momylac infant formulas (Momylac 1, 2, 3, Premium variants, LBW, L&S Free), infant cereals (Shishulac Rice, Wheat Apple, Wheat Apple Cherry, etc.), and protein supplements for children (Bebymil Junior Chocolate, Vanilla) and lactating women (Mommypro Chocolate, Vanilla).

GST Registration and Trademarks:

• The applicant is registered under the Central/ Rajasthan Goods and Services Tax Act, 2017 (GSTIN: 08AADCL6824D1ZM) and possesses various trademarks for its products.

Nature of Products:

• The principal/dominant item of the applicant is infant milk formula, which serves as a substitute for mother’s milk for infants. The products are designed to meet specific nutritional requirements for different age groups and conditions, such as low birth weight infants and lactose-intolerant babies.
• Detailed descriptions of the products, including their nutritional composition and benefits, were provided by the applicant to support their classification and tax treatment.

Manufacturing Process:

• The manufacturing process involves the formulation of infant milk formula using ingredients such as whole milk powder, whey protein concentrate, soybean fat, lactose, vitamins, and minerals. The products are designed to support various aspects of infant growth and development, including gut health, bone development, brain development, and immunity.

Taxation Issue Raised:

• The applicant sought clarification on the applicable GST rate for their products, particularly “Milk food for babies” and “Milk for babies” marketed under the brand name “Momylac.”
• While the applicant was charging GST at the rate of 18% (9% CGST & 9% SGST/18% IGST) under HSN 19011090, competitors were charging lower rates under different HSN codes, creating confusion.

GST Classification and Applicable Rate:

• The ruling authority analyzed the relevant chapters of the Customs Tariff Act, 1975, to determine the classification of the applicant’s products.
• After examining the manufacturing process and product composition, it concluded that the products should be classified under HSN 19011090, which attracts a GST rate of 18% (9% CGST & 9% SGST/18% IGST).

Ruling and Conclusion:

• The ruling clarified that the GST rate payable by the applicant for the supply of “Milk food for babies” and “Milk for babies” under the brand name “Momylac” is indeed 18% (9% CGST & 9% SGST/18% IGST) under HSN 19011090.
• This ruling provides clarity for the applicant regarding the tax treatment of its products and ensures compliance with GST regulations.

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, RAJASTHAN