2025 (4) TMI 1008 - HC - GST

Challenge to assessment order - falvoured milk sold by the petitioner would fall within the tariff heading CH 2202 or 0402? - conversion of milk into milk powder and the charges collected on such conversion was chargeable at the rate of 18% or not - HELD THAT - On the question of conversion charges and taxability of conversion charges from milk to milk powder the learned counsel for the petitioner would contend that the said issue was considered again in the appeal filed for the subsequent period of 2019-2020 wherein the appellate authority has accepted the contention of the petitioner that such conversion charges would not attract interest at 18% but would attract tax at the rate of 5%. The order of assessment dated 09.03.2021 and the order of appeal dated 16.12.2024 are set aside and the matter is remanded back to the Assessing Officer for passing a fresh assessment order - The assessing officer shall levy tax on the sale of flavoured milk by the petitioner by treating the flavoured milk to be under tariff heading No.0402. Petition disposed off.

Summary

The Andhra Pradesh High Court, per Justice R. Raghunandan Rao, disposed of the writ petition filed by a GST-registered dealer challenging the assessment order dated 09.03.2021 and the appellate order dated 16.12.2024. The dispute concerned two key issues: (1) classification of flavoured milk under tariff heading CH 2202 versus 0402, and (2) the tax rate applicable on conversion charges from milk to milk powder.Relying on a recent Division Bench decision (W.P.No.254 of 2024), the Court held that flavoured milk falls under tariff heading 0402, not 2202. Regarding conversion charges, the Court noted that in a subsequent appeal for 2019-20, the appellate authority accepted the petitioner's contention that such charges attract tax at 5%, not 18%. The Court set aside both impugned orders and remanded the matter to the Assessing Officer for fresh assessment. The Assessing Officer is directed to classify flavoured milk under tariff heading 0402 and reconsider the taxability and rate on conversion charges in light of the petitioner's submissions. There was no order as to costs.