In re Ramdev Food Products Pvt. Ltd. (AAAR Gujarat)
In the case of In re Ramdev Food Products Pvt. Ltd., the Gujarat Appellate Authority for Advance Ruling (AAAR) reviewed the GST classification and applicable tax rate for instant mix flours manufactured and supplied by the appellant. The appellant contended that these mixes retained their identity as flours and should fall under headings 1101, 1102, or 1106, attracting a GST rate of 5%. They argued that the mixes are not “ready-to-eat” products but require further preparation, thereby qualifying as flours under Chapter 11. Conversely, the Gujarat Authority for Advance Ruling (GAAR) classified these products under HSN 2106, imposing an 18% GST rate as per Notification No. 01/2017.
The GAAR justified its classification by emphasizing the inclusion of additives like spices and flavoring agents, which altered the essential character of the product from flour to a food preparation. It highlighted that the products were labeled as “instant mix,” indicating their readiness for cooking with minimal preparation, and hence were not merely flours. The appellant challenged this ruling, asserting that the additives constituted only a small proportion and that the primary component and cost driver remained the flour. Additionally, the appellant argued that the supply of certain products, like idli/dosa mix with masala packs, constituted composite supplies rather than mixed supplies. However, the GAAR and subsequently the AAAR upheld the classification under HSN 2106, maintaining the 18% GST rate. This case underscores the complexities of GST classification for processed food products.
