In re Venkateswara Cashew Chikky Manufacturers (GST AAR Andhra Pradesh)
In the case of Venkateswara Cashew Chikky Manufacturers, the query arises about the classification of their product “N.B.S. Crackle.”
The applicant, Venkateswara Cashew Chikky Manufacturers, produces a product known as “N.B.S. Crackle.” The composition of this product includes ingredients like sugar, cashew nuts, butter, liquid glucose, and permitted flavors. The manufacturing process involves boiling sugar and water to form a vitreous mass, followed by the addition of cashew nuts, butter, and liquid glucose. The mixture is then cooled, shaped, and processed using specialized machines. The final product is primarily used as a topping in ice cream manufacturing.
The central issue revolves around the classification of “N.B.S. Crackle” under GST. The applicant contends that the product falls under the category of “sugar boiled confectionery” and should be classified under Chapter Heading 1704 as per Schedule II of Notification No. 01/2017, dated 28-6-2017. However, it is important to consider whether the product truly aligns with the characteristics of traditional “sugar boiled confectionery.”
Upon examination, it becomes clear that “N.B.S. Crackle” serves an industrial purpose rather than being a direct consumer confectionery. It is used as an ingredient in the production of ice creams, specifically as a topping. This sets it apart from traditional sugar boiled confectionery, which is meant for immediate consumption by end-users. The usage and intended purpose of the product play a crucial role in its classification.
After thorough analysis and consideration of the ingredients, manufacturing process, and usage of “N.B.S. Crackle,” it is evident that the product does not qualify as traditional “sugar boiled confectionery.” The industrial nature of its use, primarily as an ingredient in ice cream production, differentiates it from products intended for direct consumption by consumers. Therefore, the classification of “N.B.S. Crackle” under the category of “sugar boiled confectionery” is not applicable. The product falls outside the scope of this classification as it does not align with the characteristics and usage of traditional confectionery items.
It is crucial to accurately classify products under appropriate categories for proper taxation and regulatory compliance. In the case of “N.B.S. Crackle,” understanding its specific industrial usage and distinct characteristics is essential for making the correct classification decision under GST regulations.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH
(Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub- section (4) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017)
1. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and SGST Act, 2017 are in parimateria and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the APGST Act.
2. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s. Sri Venkateswara Cashew Chikky Manufacturers (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017.
3. Brief Facts of the case:
3.1 M/s Sri Venkatcswara Cashew Chikky Manufacturers (hereinafter referred to as applicant”) is engaged in manufacturing and supply of an edible product under the name “Crackle”, which is, as per applicant, identically known and recognised as ‘N.B.S Crackle’ and contains ingredients in following proportion. Applicant is having GST Registration number 37ABYPV0474E1Z1.
