TMI Blog2021 (1) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... puted fact that the product in question also does not have the characteristics, required under FSSAI and BIS, to be considered as Milk Powder. Thus the instant product does not cover under the heading 0401 or 0402. The other remaining headings of Chapter 4 are not relevant to the instant product. Scope of alternate / competing entry under Chapter 18 - HELD THAT:- The entry covers cocoa (including cocoa beans) in all forms, cocoa butter, fat and oil preparations containing cocoa. Explanatory Notes of World Customs Organisation to heading 1805 clearly specify that cocoa powder to which milk powder or peptones have been added fall under tariff heading 1806. Heading 1806 covers Chacolate and other food preparations containing cocoa and Wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the request of the Government of Karnataka to supply milk powder mixed with chocolate, they also manufacture supply Chacolate flavoured Whole Milk Powder (Chocolate Milk Powder in short), effective from November 2017, to different schools located in the districts of Mysuru and Bellary region. They classified the said Chocolate Milk powder under chapter 1806 and are paying the GST at the rate of 18%. 3. The AG audit, during 2020, has raised an objection on the classification of Milk powder mixed with chocolate powder (Chacolate Milk Powder), saying that even after mixing of chocolate powder into Milk powder, the product will still remains as Skimmed milk powder / whole milk powder and the same has to be classified under chapter 0402 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Minimum 26.0 and less than 42.0 Milk Protein in Milk solids not fat, Minimum % (m/m 34 Titrable acidity, Maximum (ml 0.1 NaOH for 10g Solids not-fat) - 18 Insolubility Index, Maximum, ml 2 Total ash, Maximum, % (m/m) on moisture and fat free basis 9.3 Scorched particles maximum Disc B 5.3 The above Specified percentages are requirements for classifying the product as milk Powder. Further, after mixing chocolate powder into the whole Milk powder the Milk Fat and protein content will come down to below the spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the KGST Act. 7.3 The Applicant seeks advance ruling in respect of the classification of the product Chacolate Milk Powder . The contentions of the applicant and the nature of the product have been examined and the same is discussed in the subsequent paras. 7.4 The Applicant, vide their letter dated 17.12.2020, submitted that the instant product Chacolate Milk Powder of 100 gram has the composition of 97.5% of Whole Milk Powder and 2.5% of Chacolate flavoured powder. They also furnished the composition of Chacolat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34.125% 7.6 The applicant submits that the composition of specified parameters, under FSSAI, of whole milk powder get altered on blending of the whole milk powder with chocolate flavoured powder to obtain the instant product and hence the instant product can not be considered as Whole Milk Powder thereby does not merit classification under 0402. Further the colour of the instant product does not satisfy the requirement of the colour of the whole milk powder, in terms of BIS standards and thereby even on this account also the instant product can t be considered as whole milk powder. In view of the above, the applicant contends that their product Chacolate Milk Powder merits classification under heading 1806. 7.7 We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / undisputed fact that the product in question also does not have the characteristics, required under FSSAI and BIS, to be considered as Milk Powder, in terms of para 7.5 supra. Thus the instant product does not cover under the heading 0401 or 0402. The other remaining headings of Chapter 4 are not relevant to the instant product. 7.9 We, now proceed to examine the alternate / competing entry under Chapter 18, which covers cocoa (including cocoa beans) in all forms, cocoa butter, fat and oil preparations containing cocoa. Explanatory Notes of World Customs Organisation to heading 1805 clearly specify that cocoa powder to which milk powder or peptones have been added fall under tariff heading 1806. Heading 1806 covers Chacolate and o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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