In re V K Samy Biscuits & Confectioneries (GST AAR Tamilnadu)
In the case of In re V K Samy Biscuits & Confectioneries, the Tamil Nadu Authority for Advance Ruling (AAR) examined the applicable GST rate on “Maida Pappad” manufactured by the applicant. The business involved in the production of this product claimed it to be a traditional pappad, created through a sheeting and shaping process, using ingredients like maida, sugar, vanaspati, and salt. The process involved preparing dough, shaping and drying it in an oven, after which the product still required frying before consumption. The applicant argued that since their product is not ready-to-eat and is not made via extrusion, it should be classified under HSN 1905 90 40 as “Pappad” and thus exempt from GST as per Notification No. 2/2017-CT (Rate), Entry 96.
However, the tax authorities took a different stance. Referring to CBIC Circular No. 200/12/2023-GST dated 01.08.2023, the State Tax Officer opined that the product does not possess the defining characteristics of traditional pappad. Instead, the product falls under the category of un-fried or uncooked snack pellets made through the extrusion process, making it taxable at 5% under HSN 1905 as per Entry 99B of Notification No. 1/2017-CT (Rate), inserted through Notification No. 9/2023-CT (Rate) effective from 27.07.2023. The tax authorities also pointed out that the product is not immediately edible and requires further frying, aligning with the nature of snack pellets rather than traditional pappads.
