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2019 (11) TMI 1326 - AAR - GSTRate of GST - outward supply of “Flavoured Milk” - HELD THAT:- The applicable rate of GST is 18% (9% CGST and 9% SGST) on all goods except the goods specified in the schedules I, II, IV, V, VI of the said Notification. Further, for interpretation of the said notification, the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as “FS to CTA, 1975”) are to be applied. The applicant informed that the process of the flavoured milk is standardisation of fresh milk according to the fat contents and then heating at certain temperature followed by filtration, pasteurisation, and homogenisation and then mixing of sugar and various flavours and finally bottling - The applicant did not provide any details what are the flavours they are using in the preparations. As seen from their website [http://www.tirumalamilk.com/flavoured-milk.php] they are preparing flavoured milk of various flavours like strawberry, pista, mango, vanilla, badam, chocolate, rose, saffron, cardamom etc. The applicant stated that (i) adding flavours to milk does not change essential character of milk; (ii) flavoured milk is a substitute for milk (iii) it is a simple preparation of milk; (iv) no manufacturing process is involved nor does milk change its composition in any way and opined that the commodity milk and milk products are enumerated in Chapter 4 and they want clarification that under which tariff item / HSN code is applicable to the above said flavoured milk. Under the GST provisions the interpretation of the said Notification is to be under the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Thus, 'flavoured milk' is classifiable under tariff item 2202 9930 of the First Schedule to the Customs Tariff Act,1975 as a “beverage containing milk” under HS code 2202. The rate of tax applicable for the said tariff item is 12% GST (6% CGST + 6% SGST) under entry no. 50 of Schedule II of Notification No.1/2017 - Central (Rate) dated 28.06.2017 as amended.
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