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2024 (4) TMI 763 - HC - GSTClassification of goods - rate of tax - Classic Malabar Parota - Whole Wheat Malabar Parota - classifiable under Chapter Heading 1905 or same are to be covered under Chapter Heading 2106- exemption from payment of GST in terms of entry No. 97 of N/N. 2/2017 dated 28.06.2017 Central Tax/ SRO No. 361/2017 dated 30.06.2017 - HELD THAT:- The Explanatory Notes to HSN sub heading 1905 provides that the most common ingredients of the products of this Heading are cereal flours, leavens and salt but they may also contain other ingredients such as gluten, starch, milk, sugar, fats, improvers etc., like yeast, sour dough, baking soda which facilitates fermentation and improve characteristics and appearances of the products. The products of this heading may also be obtained from dough based on the flour of any cereal - Rule 4 of GRI provided that goods which cannot be classified in accordance with the Rules I to III shall be classified under the Heading appropriate to the goods to which they are akin. It cannot be doubted that the products of the petitioner would be in category of Chapter Heading 1905, and therefore, by applying the fourth GRI which provides that goods which cannot be classified in accordance with the above rules shall be classified under the Heading appropriate to the goods to which they are most akin should be applied to see whether the goods should fall under the Chapter Heading 1905 or not. It is also relevant to take note of the fact that Chapter Heading 21 particularly, Entry HSN 2106 prescribes food preparation not elsewhere specified or included and the petitioner product or not akin to any of the products which are mentioned in Chapter Heading 2106. In view thereof, the petitioner’s product are to be included in Chapter Heading 1905. The two Rate Notification mentioned above would provide that similar products such as Khakhra, plain chapati or Roti are exigible for 5% tax as per 99A of the Schedule I or they are exempted from the payment of GST as per the Rate Notification - It is no doubt that the petitioner’s product is not specifically included in the exemption from payment of GST under entry 97 as the exemption notifications are to be constituted strictly and they are item specific. The petitioner’s item is not included in the exemption notification, and therefore the petitioner claims the exemption from payment of the GST has no merit. When there is no doubt in any manner that the petitioner’s product should fall within the HSN 1905, as the petitioner’s products are akin / similar to the products mentioned in the said Chapter Heading 19 and the ingredients used in and the process applied in their preparations are somewhat similar to the other products which are specifically mentioned there, the tax in the products of the petitioner’s at the rate of 18% would not be justified. If the petitioner products are akin / similar to the products mentioned in HSN code 1905 of Chapter 19 with heading Preparations of cereals, flour, starch or milk; pastrycooks’ products as the ingredients used and process applied in their preparations are somewhat similar to the products mentioned in Chapter heading HSN Code 1905, excluding the petitioner’s products from Entry 99A of the Rate Notifications which are almost similar to the three products mentioned in the said Entry, cannot be justified - the petitioner's products are also exigible at the rate of 5% GST and not 18% as contended by the learned Special Government Pleader and held by the Advance Ruling Authority and Advance Ruling Appellate Authority. The present writ petition is partly allowed.
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