In re V.S. Trading Company (GST AAR Tamilnadu)
The Tamil Nadu Authority for Advance Ruling (AAR) rejected V.S. Trading Company’s application for rectification of an earlier ruling concerning the GST classification of tapioca flour. The company had argued that the AAR incorrectly classified their product under HSN 2303.10 (“Residues of starch manufacture”) at a 5% tax rate, instead of HSN 1106 (flour of sago or roots/tubers) which they claimed should be exempt. The company asserted that the AAR misunderstood the tapioca flour production process, stating it’s made from inferior tapioca roots, not starch manufacturing residues.
However, the AAR found no errors in its original ruling. They reiterated that based on the company’s initial submissions, the tapioca flour was a byproduct of starch production, thus falling under the “Residues and waste from the food industries” category. The AAR emphasized that the company’s description of the manufacturing process aligned with starch residue production, and the product’s use as animal feed further supported this classification. The AAR concluded that the original ruling was based on the facts presented by the applicant, and no rectification was warranted, as there was no mistake apparent on the record. The AAR clarified the differences between the classification of tapioca roots under chapter 7, products of milling industry under chapter 11 and residues under chapter 23.
