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2019 (7) TMI 95 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRAClassification of goods - Prohance – D (Chocolate) - classified under Heading No. 2106 90 91? or not - whether the said food is covered under the definition of “Diabetic Food” or not? - whether it can be considered as product of cocoa or a compound preparation for making non-alcoholic beverages? - Sl- No. 46A of Schedule II to N/N. 1/2017-CentraI Tax (Rate) dated 30.06.2017 - HELD THAT:- The subject product is an edible substance consisting of nourishing and nutritive components such as carbohydrates, fats, proteins, essential mineral and vitamins and can be ingested and digested and provides nutrients to the human body. Hence there is no doubt that the subject product can be categorized as food. Whether the subject product can be considered as a diabetic food? - HELD THAT:- While Prohance contains sugar, the subject product Prohance-D does not contain sugar - it can be said that the subject product, Prohance-D is different from the parent product in as much as it contains extra ingredients as mentioned in (i) to (vi) above, ingredients which along with the other regular ingredients may assist diabetics in replacing a meal or part of it. However it is also found that the product is also advertised as providing Energy, Immune Health, Heart Health, Vitamins and Minerals and maintains cholesterol levels. On the container there is a mentioned that “Prohance-D is a specifically designed sugar free and low GI product. It contains Isomaltutose a low glycemic carbohydrate that helps minimize blood sugar spikes. It provides energy from high quality protein, fat and is rich in dietary fibre and MUFA that heart health.” The subject product is also advertised as having various other health benefits and to treat the same only as a diabetic food will not be proper in our view. Secondly, as per information available on the internet, the diabetic foods must contain high amounts of dietary fibre and some slow digestion agents. Though the preparation in question contains gum Arabic, it does not contains high amount of dietary fibre. A little amount of fibre as found in this preparation is found in all kinds of food and Prohance-D has no extra amount of fibre. It is also seen that there are no substances in its composition that help in slowing down of food moving through stomach and sugars moving to blood stream - In view of these deficiencies, the Prohance-D cannot be categorized as diabetic food. Whether the same can be treated as a product classifiable under Chapter 1 8/19 of the Tariff? - HELD THAT:- The basic product is Prohance and Prohance D is a variation of the basic product. We also find that the vanilla and chocolate flavours are just a kind of variation to attract the customers. Further we agree with the submissions made by the applicant that Prohance D will not be covered under Chapter 19 - Chapter heading 2106 of the Tariff specifically covers “Food preparations not elsewhere specified or included” and in view of the submissions made by the applicant it is clear that “Prohance-D (Chocolate)” is a food preparation which is meant to be consumed by people by dissolving the same in water or milk. It is thus, a “food preparation”, squarely covered under Chapter Heading 2106 of the Customs Tariff - We also find that both, the applicant as well as the jurisdictional officer are in agreement that the subject product falls under heading 2106 and we also have no doubt about the same. Prohance-D is a combination of various items as seen from the discussions above and can very clearly be treated as a compound preparation. This compound preparation is in powder form and can be consumed by direct mix with either water or milk. Further, the resultant beverage which is obtained after mixing the powder with water or milk is a non-alcoholic beverage and as such the Prohance-D will be clearly covered under the description ‘Compound preparations for making non-alcoholic beverages’ & therefore fall under Chap. Hdg 2106 90 50, thus attracting GST @ 18% as per Sch-III, Sr. No. 23.
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