In re Karnataka Co-operative Milk Producers Federation Ltd. (GST AAR Karnataka)
Whether the Flavored Milk is liable to be classified under HSN 0402 99 90 or under 2202 99 30 or under any other Chapter?
The “flavoured milk” is not a water based drink whereas the tariff heading 2202 deals with water based beverages and other non alcoholic beverages. Therefore it could be inferred that the pre-dominant part of the beverages covered under the heading 2202 is water. In the instant case the predominant constituent is milk and hence the “flavored milk” does not merit classification under beverage containing milk, under tariff heading 2202 9930, but merits classification as milk, under tariff heading 0402.
Tariff heading 0402 covers “milk and cream, concentrated or containing added sugar or other sweetening matter”. The instant product ‘flavoured milk’ is covered under ‘milk’ as discussed already. Therefore the instant product merits classification under tariff heading 0402 99 90.
We also take note of the fact that the Hon’ble High Court at Allahabad in the matter of Gujarat Coop. Milk Marketing Federation Ltd. Vs State of UP vide 2017(5)0STL 351(All) dated 31.05.2017, has decided that flavoured Milk is a form of Milk. The Court has also specifically observed that flavoured milk is a form of milk as it is neither a derivative of milk nor a milk product.
Thus The commodity “Flavoured Milk” is classified under the Tariff heading 0402 99 90.
AAAR order- No ruling on classification issue by AAAR as matter is pending in a proceeding
