Shri Abdul Razak Safiullah (GST AAR Tamilnadu)
Q. Whether the ‘Nizam Pakku’ bought and sold by the Applicant, the manufacturing process of which has been explained by them, is classifiable under Chapter heading 0802 8030 of the Customs Tariff and hence attract 2.5 % CGST as per Sl.No.28 of Schedule I of Notification 1/2017 Central Taxes (Rate) Dt. 28.06.2017 and equal rate of SGST?
A. “Nizam Pakku” traded by the applicant merits classification under Chapter 0802 80 90 of the Customs Tariff and attracts 6 % CGST as per SI.No. 15 of Schedule II under Notification 1/2017-Central Tax (Rate) Dt. 28.06.2017 and 6 % SGST under Notification No. II(2)/CTR/532(d-4)/2017 vide ). G.O.(Ms) No: 62 dated 29.06.2017 as amended.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, TAMILNADU
Note: Any appeal against this Advance Ruling order shall lie before the Tamil Nadu State Appellate Authority for Advance Rulings, Chennai as under Sub-Section (1) of CGST Act / TNGST Act 2017, within 30 days from the date on the ruling sought to be appealed is communicated.
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
M/s. S.A. Safiullah & Company PB No. 14, Rajagopalapuram Main Road, Pudukottai 622 003 (hereinafter referred as ‘Applicant’) is registered under the GST Act 2017 vide GSTIN No. 33AANPS2471E1Z0. The Applicant has sought Advance Ruling on,-
Whether the “Nizam Pakku” bought and sold by the Applicant, the manufacturing process of which has been explained by them, is classifiable under Chapter heading 0802 8030 of the Customs Tariff and hence attract 2.5 % CGST as per SI. No. 28 of Schedule I of Notification 1/2017 Central Taxes (Rate) Dt. 28.06.2017 and equal rate of SGST?
The applicant submitted a copy of challan evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017.
2.1 The applicant has stated that they are a Proprietary concern and is engaged in trading of Betel nut, under the name and style “Nizam Pakku” and the said brand name is owned and registered in favour of the Applicant. “Pakku” is a tamil word for “betel nut”. The said “Nizam Pakku” is manufactured by M/s Azam Laminators Pvt. Ltd. who sells the “Nizam Pakku” exclusively to the Applicant, which is marketed by them through Dealers and Distributors network. The manufacturing process of “Nizam Pakku” submitted by the applicant is as below:-
Dried betel nut is procured and broken into pieces of smaller sizes, pulverized and then gently heated with Vanaspati, so as to ensure that vanaspati is spread evenly on the surface of the betel nuts; Sugar, glucose syrup, menthol and spices, viz., cardamom and cloves are also added; the use of glucose syrup and sugar which contains moisture can form fungus and hence a meager quantity of saccharin to the extent of 1000 Parts per million is added purely for preservation purposes; the resultant product is packed in small pouches under the name and style of NIZAM PAKKU.
The same is used by people for chewing either along with betel leaves or as such. The essential character of betel nut is preserved as such and the product has not ceased to be a betel nut. It is still known only as betel nut (Pakku in Tamil) in the market and marketed as such.
2.2 The Applicant has made reference to Chapter 8 of Customs Tariff Act 1975, which includes edible fruit and nuts; peel of citrus fruit or melons and chapter note 3 of Chapter 8 which states that dried fruits and dried nuts of this chapter can even be partially dehydrated or treated for the purposes of additional preservation or stabilization, to improve or maintain their appearance. The applicant has stated that the manufacturing process of Nizam pakku undertaken by M/s Azam Laminators Pvt Ltd are exactly the same as contemplated in Chapter Note 3 of Chapter 8. To explain further,
