In re VRB Consumer Products Private Limited (GST AAR Rajasthan)
In a recent ruling, the Authority for Advance Rulings (AAR) of Rajasthan classified the product “Vanilla Mix,” a low-fat dried softy ice cream mix in vanilla flavor, under Heading 2106 90 99 of the First Schedule to the Tariff Act. This classification subjects the product to a Goods and Services Tax (GST) rate of 18%, comprising 9% Central Goods and Services Tax (CGST) and 9% State Goods and Services Tax (SGST). The ruling was based on the detailed examination of the ingredients and manufacturing process submitted by M/s VRB Consumer Products Private Limited, the applicant seeking the ruling.
The applicant asserted that the Vanilla Mix is primarily composed of milk solids, which they argued should classify the product under Heading 0404. This heading encompasses whey and products consisting of natural milk constituents. However, the AAR found that the primary ingredient in Vanilla Mix is sugar (61.2%), which outnumbers milk solids (34%). Therefore, the AAR concluded that milk solids are an additive rather than the primary component, reinforcing that the product is fundamentally a prepared foodstuff rather than a dairy product.
The classification process adhered to the principles established in the Customs Tariff Act, 1975, which uses the Harmonized System of Nomenclature (HSN) for categorizing goods. The AAR noted that while Heading 0404 covers natural milk constituents, the composition of Vanilla Mix—dominated by sugar and supplemented with various stabilizers and flavoring agents—aligns more closely with the category of “miscellaneous edible preparations” found in Chapter 21 of the Tariff Act. Specifically, Heading 2106 encompasses various food preparations that have undergone processing, making them suitable for human consumption, including powders intended for ice creams.
