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2021 (4) TMI 616 - AAR - GSTClassification of goods - Flavored Milk sold under trade name of Power Sip - to be classified under Heading 0402, Sub Heading 04029990 or not - HELD THAT:- From the constituents of the product as furnished by the applicant, it is seen that the product consists of Standardized Milk (92.00%) without removal of Fat content thereon, which is sweetened with around 8% of sugar to which color 0.08% and flavor in kesar & Badam Milk 0.120%, Rose milk 0.075% and Elaichi Milk 0.150% etc. are added and is supplied in tetra packs/ Bottle after necessary processes. The products are marketed as “Power Sip” i.e. “Flavoured milk” and are ready for consumption as stated by the applicant. Comparing the product and those covered under CTH 0402/0404, it is evident that the product in hand consisting of milk flavored with Badam/Elaichi/Kesar/Rose being ready for consumption beverages based on Milk is specifically excluded under CTH 0402, as seen from the Explanatory notes to HSN of the said chapter and hence not classifiable under CTH 0402. Also the product being not ‘Whey’, the plausible CTH will be 0404 90 only and there again the Explanatory notes clearly states that this heading includes products which lack one or more natural milk constituents, to which natural milk constituents are added, whereas in the case at hand, the product do not lack any natural milk constituents nor any natural milk constituents is added to the product. Therefore, the product is not classifiable under either CTH 0402 or 0404. Classifiable under the said tariff item 22029930 or otherwise? - HELD THAT:- Other non-alcoholic beverages, not including fruit or vegetable juice of Heading 20.09 are covered under ‘2202.99 - Other’ and as per the explanation at (B)(2), the group covers beverages ready for consumption such as those with a basis of milk. The word “beverage”, though not defined under CGST Act, 2017, is considered, in common parlance, as a drink that can be consumed directly and the instant product “flavored milk” can be consumed as it is and hence is a beverage with a basis of milk. Therefore, the product is appropriately classifiable under CTH 2202 99 30. The ‘flavoured milk’ is classifiable under Tariff Item 2202 99 30 of the First Schedule to the Customs Tariff Act, 1975 as a “beverage containing milk” under HS Code 2202.
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