In re HR Food Processing (P) Ltd (AAR Jharkhand)
Question :- What would be the classification of ‘Flavored Milk for Tea Preparation’?
Answer:- As per discussion above, the product ‘Flavored Milk for Tea Preparation’ is found to be ‘Tea Milk’ and it should be classified under Chapter 04 under heading 0401 20 00.
Question :- What would be the rate of GST applicable on the said products?
Answer:- The said product is exempted from GST vide SI. No 25 of Not. No. 2/2017-Central Tax (Rate) dated 28-06-2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, JHARKHAND
The present application has been filed under Section 97(1) of the Central Goods and Services Tax Act, 2017 and the Jharkhand Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and JGST Act”] by H K Food Processing (P) Ltd, House No 448/ A, Ground Floor, Road NO. 4, Ashok Nagar, Ranchi – 834002, Jharkhand, India. The Company is engaged in processing of milk and milk products under the Brand name OSAM’. The applicant, seeking an advance ruling in respect of the following questions:-
(a) What would be the classification of Flavored Milk for Tea Preparation?
(b) What would be the rate of GST Applicable on the said product?
2. At the outset, we would like to make it clear that the provisions of both the CGST Act and the JGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the JGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act/JGST Act would be mentioned as being under the “GST Act”.
HEARING
3. The case was taken up for preliminary hearing on 03.02.2022/ 04.02.2022 with respect to admission or rejection of present application wherein Shri Aditya Shah, Chartered Accountant attended the proceeding physically and made submissions as per contentions made in Application for Advance ruling. The application was admitted being questions related to ‘Classification of goods and rate of GST on said product’ and final hearing was concluded accordingly on the same date.
OBSERVATIONS
4. We have gone through the facts of the case, documentary evidences like Judgements of Various Courts in matter of taxation of “Flavoured Milk”, proposed product broachers; interpretation of word “Beverages”, Rate of GST of ‘MILK” submitted by the applicant. We find that the applicant is registered under Goods and Services Tax (‘GST’) Act, 2017. As per their submission, the applicant intends to process the milk and sell it as Milk which shall be used for Tea Preparation only under the product name “OSAM Samridhi”. The basic ingredient of the said products are : Milk and Milk Solids, Permitted Food Stablizer, tea enhancing flavour like Ginger. No sugar or sweetener is added in the products. The product “Osam Samridhi” will be sold in 1 litre polypack and will have shelf life of 1 day under prescribed storage condition. As per the submission, the product “Osam Samridhi” will help Tea Vendors to prepare milk more conveniently and will help the vendors to prepare more cups of tea and helping them to reduce the cost of vendors and increase their income.
5. The applicant submitted the percentage wise composition of the said product, which is as under:
