TMI Blog2020 (5) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant, it is seen that the product consists of Standardised/Toned milk (87to 89%) without removal of Fat content thereon, which is sweetened with around 101)/0 of sugar to which stabilizers, flavours, etc are added and is supplied in tetrapacks after necessary processes. The products are marketed as Thick shakes and is 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 flavoured with vanilla/ strawberry/mango/cocoa powder 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 - thus, the product is not classifiable under either C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s. Britannia Industries Limited, One India Bulls Park, 5th Floor, Tower B, 3 rd Main Road, Ambattur Industrial Estate, Chennai, TamilNadu-600 058. (hereinafter called the Applicant) are registered under GST with GSTIN. 33AABCS2066P1ZM. The applicant is a leading supplier of dairy products, biscuits, breads, etc. which are available across the country in close to 5 million retail outlets. The applicant has sought Advance Ruling on: Whether UHT Sterilized Flavoured Milk is classifiable under Chapter 4 (Tariff Heading 0402 which covers Milk... containing added sugar or other sweetening matter... or alternatively, Tariff Heading 0404 which covers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontaining milk . However, judicial precedents and the relevant GST tariff entries support classification under Chapter 4 of Customs Tariff. 2.2 The Applicant on the interpretation of law has stated that the product is UHT (Ultra High Temperature) Sterilized Milk. On the basis of the essential character of the product, the common parlance understanding of the product and judicial precedents, the product in question, i.e. flavoured milk is classifiable under Chapter 4 of the Tariff. The product under consideration, i.e. flavoured milk is a dairy produce. It is essentially milk added with sugar and permitted additives. The single largest ingredient in the product, in quantity and essence, is milk which constitutes more than 80 - 90 % of the product. The remaining ingredients in the product, i.e. sugar, cocoa, vanilla, salt etc. are added for flavour and sweetening and other additives viz. Recodan MS G 4683 and ICL - Joha T New are added for stabilising, buffering, emulsifying and thickening purposes. In other words, the additions to milk are only to ensure that the natural dairy product is flavoured such that it is the most tasty / favoured milk, while the other additives allow for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in common parlance and also as per the FSSAI (which is the Sector regulator), flavoured milk is essentially milk / dairy product, rather than a beverage made from milk and duly classifiable under Chapter heading 0402. 2.4 The applicant has further stated, that the general rules for interpretation used in Customs Tariff Act, 1975, the Section Notes, Chapter Notes and the General Explanatory Notes are mutatis-mutandis applicable to classification under the GST law (for identifying applicable rate under the Rate Notification) and as per the said General Rules for interpretation, the classification is to be determined. as a first recourse, according to the description of goods mentioned in the tariff headings or the Section Notes or Chapter Notes contained in the Schedule. The Rules further provide that when goods are prima-facie covered under two or more headings, classification shall be affected such that a specific entry will prevail over a general entry. Accordingly, as milk is specifically covered under the description of Heading 0402, the product will fall for classification under the said heading. Thus, even if flavoured milk is classifiable in two or more headings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Drinks [1999 UPTC 1130] = 1999 (9) TMI 914 - ALLAHABAD HIGH COURT 2.6 The applicant has further stated that While in terms of the foregoing submissions, the most appropriate classification of the product in question is 0402, without prejudice, if a view is taken that flavoured milk is not milk itself but a product containing milk / milk constituents, the product would still be classifiable under Chapter 4, specifically under entry 0404 90 00 which covers product consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included. In this regard, reference is made to the decision in Nestle India Limited vs. Commissioner of Central Excise [2017 (6) GSTL 483 (Tri. - Del.)] = 2017 (3) TMI 1409 - CESTAT NEW DELHI . It was held that Nutritious Milk, a product made up of milk predominantly and small quantity of artificial flavouring substance is classifiable under 0404 90 00 as a product consisting of natural milk constituents. It was also held that the addition of small quantities of other substances will not change the essential character of the product and the product will remain nutritious milk on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.5 11.4 Sweetened Milk 99.4 99.4 99.3 98.4 Step 3: Flavoured Milk Preparation for Processing Remaining Ingredients Sweetened Milk from Step 2 99.4 99.4 99.3 95.4 Stabliser blend 0.3 0.3 0.3 0.3 Flavours 0.3 0.2 0.2 0.2 Iodised Salt 0.0 0.0 0.0 Acidity Regulator (INS 339(ii)) 0.1 0.1 0.1 0.2 Fruit Puree 0.1 0.1 Red Colour(INS127)/(INS 160b (ii)) 0.0 0.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Milk products was also submitted. 4. The applicant is under the administrative control of Central Tax. The said jurisdictional authority was addressed to report if there are any pending proceedings in the applicant s case on the issues raised by the applicant in the ARA application and for comments on the issues raised. The said authority did not furnish any report and also has not furnished any comments. Hence, it is construed that there is no proceedings pending in the case of the applicant on the questions seeking Advance ruling before us. 5. The State Jurisdictional Officer vide their letter R.C. No.236979/2019/B3 dated 24.09.2019 submitted that there are no proceedings are pending in the case of the applicant on the issue raised by them in the ARA application. 6.1 We have considered the submissions made by the applicant carefully. The applicants manufacture/procure and supply UHT Sterilised Flavoured Milk and market it under the brand name Britannia Winkin Cow Thick Shake . The product is made in multiple flavours -strawberry(strawbericious), Mango(mangolicious), Vanilla(vanillicious) and chocolate(chocolicious)(hereinafter referred to as the Products ). As per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0402 MILK AND CREAM, CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTERMILK AND CREAM, CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER 040210 - In powder, granules or other solid forms, of a fat content, by weight not exceeding 1.5% : 04021010 --- Skimmed Milk 04021020 --- Milk food for babies 04021090 --- Other - In powder, granules or other solid forms, of a fat content, by weight not exceeding 1.5% : 04022100 -- Not containing added sugar or other sweetening matter 040229 -- Other : 04022910 --- Whole milk Whole milk 04022920 --- Milk for babies Milk for babies 04022990 --- Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 - - Other This heading covers milk (as defined in Note 1 to this Chapter) and cream, concentrated (for example, evaporated) or containing added sugar or other sweetening matter, whether liquid, paste or solid (in blocks, powder or granules) and whether or not preserved or reconstituted. Milk powder may contain small quantities of starch (not exceeding 5 % by weight), added, in particular, to maintain the reconstituted milk in its normal physical state. The heading does not cover : (a) Curdled. fermented or acidified milk or cream ( heading 04.03 ). (b) Beverages consisting of milk flavoured with cocoa or other substances ( heading 22.02 ). Subheading Explanatory Note. Subheadings 0402.10, 0402.21 and 0402.29 These subheadings do not cover concentrated milk or cream in the form of paste (subheadings 0402.91 and 0402.99), 04.04 - Whey, whether or not concentrated or containing added sugar or other sweetening matter: products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included. 0404.10 - Whey and modified whey, whether or not concentrated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally covered elsewhere 6.4 From the constituents of the product in hand furnished by the applicant, it is seen that the product consists of Standardised/Toned milk (87to 89%) without removal of Fat content thereon, which is sweetened with around 101)/0 of sugar to which stabilizers, flavours, etc are added and is supplied in tetrapacks after necessary processes. The products are marketed as Thick shakes and is 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 flavoured with vanilla/ strawberry/mango/cocoa powder 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flavoured. This group include, inter alia : (1) Sweetened or flavoured mineral waters (natural or artificial). (2) Beverages such as lemonade, orangeade, cola, consisting of ordinary drinking water, sweetened on not, flavoured with fruit juices or essence, or compound extracts, to which citric acid tartaric acid are sometimes added. They are often acrated with carbon dioxide gas, and are generally presented in bottles or other airtight containers (B) Other non-alcoholic beverages, not including fruit or vegetable Juices of heading 20.09. This group includes. inter alia (1) Tamarind nectar rendered ready for Consumption as a beverage by the addition of water and sugar and straining. (2) Certain other beverages ready for consumption. such as those with a basis of milk and cocoa. From the above, it is clear 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 consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresented before the GST Council and the Council has considered the same in the 31st GST council Meeting. The Council has accepted the findings of the Fitment committee, which has observed as under: 18. Flavoured Milk 2202 12% Clarification that it is classifiable under Chapter 4 1. The Explanatory Notes to HSN describe the goods classifiable under the heading 0402 as under: This heading covers milk (as defined in Note 1 to this Chapter) and cream, whether or not pasteurized sterilised or otherwise preserved, homogenised or peptonised but it excludes, milk and cream which have been concentrated or which contain added sugar or other sweetening matter (heading 04.02) and curdled, fermented or acidified milk and cream (heading 04.03). The products of this heading may be frozen and may contain the additives referred to in the General Explanatory Note to this Chapter. The heading also covers reconstituted milk and cream having the same qualitative and quantitative compost non as the natural products. 2. Flavoured milk is classifiable under HS code 2202. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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