Case Law Details

Case Name : In re Wonderfrutz Products LLP (GST AAR Karnataka)
Appeal Number : Advance Ruling No. KAR ADRG 27/2018
Date of Judgement/Order : 17/11/2018
Related Assessment Year :
Courts : AAR Karnataka (34) Advance Rulings (515)

In re Wonderfrutz Products LLP (GST AAR Karnataka)

Whether Tutti-fruity be classified under HSN 08111010 or 20060000?

Tutti-fruity is a colourful confectionery containing various chopped and usually candied fruits, or an artificially created flavouring simulating the combined flavour of many different fruits. It is often used in making tutti-fruity ice cream, bakery and confectionery. In India, tutti-fruity is candied raw papaya. These are always small cubical pieces often brightly coloured. The most common colour being red, tutti-frutti are also available in rich green and yellow colours. These are used in various bakery products including cakes, milk-breads, cookies, dilkhush and buns. Tutti-frutti is also used in cold desserts as topping for ice-creams and sundaes. They are also used in sweet paans.

The submissions of the applicant have been examined as it is seen that the product tutti-frutti is manufactured out of fruits, especially raw papaya, which is first stored in brine solution after peeling and then cut into cubes, later washed and boiled in water and cooked with sugar, colour, preservative, citric acid. Lastly, the product is dried and packed for sale. There is a process of cooking by boiling in water and sugar is also added.

Chapter 20 of CTH relates to preparations of vegetables, fruits, nuts or other parts of plants and Chapter Note no. 1 states that this chapter does not cover vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11; The tariff item 20.06 deals with vegetables, fruits, nuts, fruit-peel and other parts of plants which are preserved by sugar (drained, glace or crystallised). The item in question is no doubt a fruit.

In the instant case the process of preparation of the product tutti-frutti by the applicant tallies with the process referred to in the explanation supra. In view of the above, the product tutti-frutti is rightly classifiable under CTH 20060000. 

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA

1. M/s Wonderfrutz Products, (called as the ‘Applicant’ hereinafter), having its registered office at No.80, Masthi Road, Mylandahalli Village, Kudaynoor Post, Malur Taluk, Kolar District, having GSTIN number 29AACFW4389C1ZW, has filed an application for Advance Ruling under Section 97 of CGST Act, 2017 and KGST Act, 2017 read with Rule 104 of CGST Rules 2017 & KGST Rules 2017, in form GST ARA-01 discharging the fee of Rs.5,000-00 each under the CGST Act and the KGST .Act.

2. The Applicant is a partnership firm engaged in the manufacture and selling of Tutty-fruity and is registered under the Goods and Services Act, 2017.

The applicant has sought advance ruling in respect of the following question:-

a) Whether Tutti-fruity be classified under HSN 08111010 or 20060000.

3. The applicant furnishes some facts relevant to the stated activity:-

a. Wonderfrutz Products LLP is in the business of manufacturing and selling Tutty-fruity.

b. Tutti-fruity is a colourful confectionery containing various chopped and usually candied fruits, or an artificially created flavouring simulating the combined flavour of many different fruits. It is often used in making tutti-fruity ice cream, bakery and confectionery. In India, tutti-fruity is candied raw papaya. These are always small cubical pieces often brightly coloured. The most common colour being red, tutti-frutti are also available in rich green and yellow colours. These are used in various bakery products including cakes, milk-breads, cookies, dilkhush and buns. Tutti-frutti is also used in cold desserts as topping for ice-creams and sundaes. They are also used in sweet paans.

c. The applicant states that they have ambiguity regarding the classification of the product tutti-frutti and for the same they have referred two HSN codes – 0811 and 2006. The description given by these HSN codes are as follows:-

i. Chapter 8, HSN Code 0811 reads as “Fruit and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not containing added sugar or other sweetening matter. Code 0811 10 10 — containing added sugar.

ii. Chapter 20, HSN Code 2006 00 00 reads as “Vegetables, fruits, nuts, fruit peel and other parts of plants, preserved by sugar (drained, glace or crystallised)

d. The process of preparation of tutti-frutti, as furnished by the Applicant, is as under:-

i. Raw papaya is peeled, stored in brine solution, cut into cubes

ii. Next it is washed and boiled in water and cooked with sugar, colour, preservative, citric acid until desired quality is attained

iii. Once ready the product is dried and packed for sale.

e. The product Tutti-frutti is primarily candied raw papaya and both chapters 8 and 20 cover fruits. However, on analysis of the process of preparation, boiling is an essential part of the process and chapter 8 specifically mentions the process of cooking by steaming or boiling in water whereas chapter 20 only mentions preserving by sugar and is silent on the process of cooking / boiling.

f. Hence, the applicant is of the opinion that since both cooking and adding sugar are an essential part of the process of preparing Tutti-frutti, the HSN code 0811 10 10 is the correct classification for the product tutti-frutti or candied raw papaya.

4. FINDINGS & DISCUSSION:

4.1 The submissions of the applicant have been examined as it is seen that the product tutti-frutti is manufactured out of fruits, especially raw papaya, which is first stored in brine solution after peeling and then cut into cubes, later washed and boiled in water and cooked with sugar, colour, preservative, citric acid. Lastly, the product is dried and packed for sale. There is a process of cooking by boiling in water and sugar is also added.

4.2 The notification No.01/2017-Central Tax (Rate) dated 28.06.2017 provides the following clauses, with regard to classification of goods under GST, at explanation to the said Notification.-

(iii) “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

In view of the above, the Customs Tariff Act, 1975 including the Section & Chapter Notes, General Explanatory Notes shall apply to the classification of the goods under GST also.

4.3 Chapter 8 of the Customs Tariff Act of India relates to Edible fruits and nuts; peels of citrus fruit or melons. Tariff item 0811 deals with “fruits and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not containing added sugar or other sweetening matter.

From the above it becomes evident that the main requirement for a commodity to be classified under the tariff heading 08.11 must be –

1. They are fruits and nuts,-

a. uncooked or cooked by steaming or boiling in water

b. frozen

c. Whether or not containing added sugar or other sweetening matter.

4.3.1 In this regard reference is made to the explanatory notes to the Hormonised Commodity Description and Coding System, with respect to the CTH 0811, which is appended below:

08.11- Fruit and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not containing added sugar or other sweetening matter.

081 1.10 – Strawberies

0811.20 – Raspberries, blackberries, mulberries, loganberries, black, white or red currants and gooseberries

0811.90 – Other

This heading applies to frozen fruit and nuts which, when fresh or chilled, are classified in the preceeding headings of this Chapter (As regards the meanings of the expressions “chilled” and ‘frozen”, see the General Explanatory Note to this Chapter)

Fruit and nuts which have been cooked by steaming or boiling in water before freezing remain classified in this heading. Frozen fruit and nuts cooked by other methods before freezing are excluded ( Chapter 20)

Frozen fruit and nuts to which sugar or other sweetening matter has been added are also covered by this heading, the sugar having the effect of inhibiting oxidation and thus preventing the change of colour which would otherwise occur, generally on thawing out. The products of this heading may also contain added salt.

4.3.2 The explanatory’ notes also provide that the heading 08.11 applies to fruits which may have been cooked by boiling and are then frozen. In the instant case the flow chart provided by the applicant, though shows boiling of the fruit, does not indicate the freezing of the fruit consequent to processing. Therefore, we are of the opinion that the product as presented by the applicant does not qualify classification under Tariff Heading 08.11

4.4 The other competing entry is CTH 20.06.00.00. Chapter 20 of CTH relates to preparations of vegetables, fruits, nuts or other parts of plants and Chapter Note no. 1 states that this chapter does not cover vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11; The tariff item 20.06 deals with vegetables, fruits, nuts, fruit-peel and other parts of plants which are preserved by sugar (drained, glace or crystallised). The item in question is no doubt a fruit.

4.4.1 In this regard reference is made to the explanatory notes to the Hormonised Commodity Description and Coding System, with respect to the CTH 2006, which is appended below:

20.06 – Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glace or crystallized).

The products of this heading are prepared first by treating the vegetables, fruit, nuts, fruit-peel or other parts of plants with boiling water (which softens the material and facilitates penetration of sugar) and then by repeated heating to boiling point and storage in syrups of progressively increasing sugar concentration until they are sufficiently impregnated with sugar to ensure their preservation.

The principal products preserved by sugar are whole fruit or nuts (cherries, apricots, pears, plums, chestnuts (marrons glaces), walnuts etc.), sections or pieces of fruit (oranges, lemons, pineapples, etc.), fruit-peel (citron, lemon, orange, melon etc.), other parts of plants (angelica, ginger, yams, sweet potatoes, etc.) and flowers (violets, mimosa, etc.)

Drained products are prepared by using a syrup (e.g. a mixture of invert sugar or glucose with a proportion of sucrose) which does not crystallize on exposure to the air. After impregnation the excess syrup is drained off leaving the product sticky to the touch.

Glace products are obtained by dipping the drained product in a sucrose syrup which dries as a thin, shiny coating.

Crystallised products are prepared by allowing the sucrose syrup to penetrate into the product so that, on drying, it forms crystals on the surface or throughout the product.

Those goods preserved by sugar and put up in syrup, whatever the packing, are excluded from this heading (heading 20.02, 20.03 or 20.05. in the case of vegetables, or heading 20.08, in the case of fruit, nuts, fruit-peel and other edible parts of plants e.g., marrons, glaces or ginger).

Dried fruits (e.g., dates and prunes) remain classified in Chapter 8 even if small quantities of sugar have been added, or if the exterior is covered with a deposit of dried natural sugar which may give the fruit an appearance somewhat similar to that of crystallized fruit of this heading.

4.5 In the instant case the process of preparation of the product tutti-frutti by the applicant tallies with the process referred to in the explanation supra. In view of the above, the product tutti-frutti is rightly classifiable under CTH 20060000.

5. In view of the foregoing, we rule as follows

RULING

The Tutti-frutti being the product of papaya is covered under Chapter / Heading / Sub-heading / Tariff item 20 06 00 00.

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