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TMI Blog2021 (1) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... varied types of mixed flour under the 'Talod' brand name that are used to prepare instant Farsan and other similar dishes; that ready to mix/instant mix is a flour of grains and pulses mixed with spices and condiments, that recipe for preparing farsan/eatables is printed on the packet of product and by following the direction of recipe, farsan/eatables can be prepared instantly after adding such other ingredients as required. The process followed by Talod can be understood as under: (a) Talod purchases food grains and pulses from open market. (b) Such pulses are sorted and washed and then send to grinding machine. (c) Pulses are grinded into flour in grinding machine for e.g. where Grams is purchased it results into gram flour by following grinding process. In certain cases, Talod purchases grinded flour directly from the vendors. (d) Now, certain spices are mixed in flour and such mixed flour is packed in various packings. (e) Mixed flour (commercially known as 'Instant Mix Flour') are sold in open market or through distributors to consumers. (f) End consumer of such instant mix flour is required to follow certain food preparation process before such product can be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wder of chilli cloves, Baciliyam, Black pepper, Coriander, Tej patta (Clove Leaves), Sodium bi-carbonate, Citric acid, Asafoetida, Ajma, Sounff, Chutney powder contacts, Wood apple powder from (Limonia Acidissima). 3. Dhokla Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric acid, Asafoetida. 4. Handwa Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric acid, Turmeric, Chillies, Garam masala (powder at curry leaves Bundian, Fennel seeds, Black peppers, Tajpatta, Clove leaves). 5. Idli Mix Flour Rice, Udad dal, Iodised salt, Sodium Bicarbonate, Citric acid. 6. Dosa Mix Flour Rice, Udad dal, Iodised salt, Sodium Bicarbonate, Citric acid. 7. Dahi-wada Mix Flour Moong dal, Udad dal, Iodised salt, Sodium Bicarbonate, Citric acid. 8. Dalwada Mix Flour Moong dal, Udad dal, Iodised salt, Sodium Bicarbonate, Citric acid. 9. Khichu Mix Flour Paddy & Sago (in powder form), Iodised salt, Cumin seeds, Carbonate of Soda. 10. Upma Mix Flour Wheat Granule, Iodised salt, Sugar, Gram dal, Udad dal, Mustard seeds, Cummin seeds, Neem leaves (sweet), Green Chilli, Hydrogenated Vegetable Oil, Citri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 as well as to explanations (iii) and (iv) of the said notification which provides tax rates on intra-state supplies of goods. The applicant has described the relevant entries related to mixed flour products appearing in Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 as under: Sr.No. Chapter/Heading/Sub-Heading/Tariff item Description of Goods CGST Rate 59. 1106 Meal and powder of the dried leguminous vegetables of heading 0713 (pulses) [other than guar meal 1106 10 10 and guar gum refined split 1106 10 90], of sago or of roots or tubers of heading 0714 or of the products of Chapter 8, put up in unit container and,- (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone 2.5% 25. 0713 Dried leguminous vegetables, shelled, whether or not skinned or split put up in unit container and,- (a) bearing a registered brand name; or (b) bearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed flour; there is no need to go under residual entry. 7.2 The applicant submitted that as per the legal provisions of erstwhile VAT Law, no VAT was payable on the cereal or pulse flour. They have reproduced the entry for classification in VAT schedule as under: SCHEDULE-I (See: Sub-section (1) of section 5) GOODS, THE SALES OR PURCHASE OF WHICH ARE EXEMPT FROM TAX Sr.No. Description of Goods Conditions & exemptions 12. i. Cereals and pulses. ii. Flour of cereals and pulses except Maize Flour. iii. Wheat flour, Rava, Suzi or maida made from wheat. 7.3 The applicant has also referred to different orders determined under VAT regime in relation to classification of cereal or pulse flour which are discussed hereunder: (a) In the case of KITCHEN EXPRESS OVERSEAS LTD.-SANTEJ, vide determination order no.2010/D/171-177/No.356-359 dated 12.08.2010, it is held and determined that instant mix products 'Gota flour', 'Khaman flour', 'Dalwada flour', 'Dahiwada flour', 'Idli flour', 'Dhokla flour' and 'Dhosa flour' are covered by Entry-12(ii) of Schedule-I to the G.VAT Act, 2003 and are tax free goods. (b) In the case of VITAGREEN PRODUCTS PVT.LTD.-MATODA, RAJKOT, vide d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahi-wada Mix Flour 8. Dalwada Mix Flour 9. Khichu Mix Flour 10. Upma Mix Flour 11. Rava Idli Mix Flour 12. Medu-vada Mix Flour 13. Muthiya Mix Flour 14. Pudla Mix Flour 15. Moong Bhajiya Mix Flour 16. Cholafali Mix Flour 17. Bhajiya Mix Flour Further, applicant also supplies chutney powder on which applicant is paying GST @5% as mentioned in Sr.No.100A under HSN 2106 as under: Sr.No. HSN Description Ingredients 100A 2106 Chutney Powder Wood apple powder, Sugar, Iodised salt, Chilli powder, Coriander Cumin Powder. 7.5 The applicant has submitted that he provides chutney powder in a pouch along with GotaMix and Bhajiya Mix and no extra amount is collected for such chutney powder. Hence, supply of Gota Mix and Bhajiya Mix flour alongwith chutney powder should be considered as composite supply. Accordingly, by going through GST rate schedule along with Customs and VAT classification, the applicant is of the view that all the instant mix flours should be classified under HSN 1106 and GST rate should be 5%, Chutney powder should be classified under HSN 2106 and GST rate applicable should be 5% and Chutney powder when supplied with Gota M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone 5% 13 1901 Malt extract, food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of heading 0401 to 0404, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis not elsewhere specified or included [other than mixes and doughs for the preparation of bakers' wares of heading 1905]"; 18% 8.2 The applicant has stated that it can be understood from the above the both the chapter heading 1106 and 1901 covers flour and flour preparations and hence, with this additional submission, they intend to submit that the 'Flour' for which advance ruling is sought for is covered under Chapter heading 1106 and not under 1901; that based on the explanations (iii) and (iv) of Notification No.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2106 5% 8.5 The applicant has given additional submission through email dated 20.07.2020 vide which they have submitted photocopies of the invoices showing purchase of the pulses made by them such as Moong mogar, moong kora, urad gota, gramdal kori etc.. Also vide additional submission given through email dated 21.07.2020 they have submitted the Percentage-wise break-up of the floors and other ingredients as under : Sr.No. Product Dried leguminous vegetable flours Rice and wheat flours Total flours Spices and other ingredients Chana Dal flour Udad dal flour Moong /Math Dal flour Total of leguminous flours Soji flour (wheat granules) Rice flour Wheat flour Sabu Dana flour Total of rice flours / wheat flours 1. Khaman Mix Flour 66% 66% 0% 66% 34% 2. Gota Mix Flour 75% 75% 0% 75% 25% 3. Dhokla Mix Flour 45% 45% 45% 45% 90% 10% 4. Handwa Mix Flour 5% 45% 50% 35% 35% 85% 15% 5. Idli Mix Flour 45% 45% 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that recipe for preparing farsan/eatables is printed on the packet of product and by following the direction of recipe, farsan/eatables can be prepared instantly after adding such other ingredients as required. The applicant has given the details of raw materials used in various products manufactured and flour of grains and pulses and other condiments contained in the products as follows: Sr.No. Product Ingredients used 1. Khaman Mix Flour Grams flour, Sugar, Iodised salt, Citric acid, Sodium bi carbonate, Turmeric. 2. Gota Mix Flour Grams flour, Sugar, Iodised salt, Chilli powder, Garam masala (powder of chilli cloves, Baciliyam, Black pepper, Coriander, Tej patta (Clove Leaves), Sodium bi-carbonate, Citric acid, Asafoetida, Ajma, Sounff, Chutney powder contacts, Wood apple powder from (Limonia Acidissima). 3. Dhokla Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric acid, Asafoetida. 4. Handwa Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric acid, Turmeric, Chillies, Garam masala (powder at curry leaves Bundian, Fennel seeds, Black peppers, Tajpatta, Clove leaves). 5. Idli Mix Flour Ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Idli Mix Flour 45% 45% 45% 45% 90% 10% 6. Dosa Mix Flour 45% 45% 45% 45% 90% 10% 7. Dahiwada Mix Flour 75% 19% 94% 0% 0% 94% 6% 8. Dalwada Mix Flour 10% 85% 95% 0% 95% 5% 9. Meduvada Mix Flour 2% 84% 86% 9% 9% 95% 5% 10. Pudla Mix Flour 96% 96% 0% 96% 4% 11. Moong Bhajiya Mix Flour 10% 85% 95% 0% 95% 5% 12. Chorafali Mix Flour 98% 98% 0% 98% 2% 13. Bhajiya Mix Flour 93% 93% 0% 93% 7% 14. Upma Mix Flour 10% 10% 20% 70% 70% 90% 10% 15. Rava Idli Mix Flour 10% 10% 20% 70% 70% 90% 10% 16. Muthiya Mix Flour 0% 90% 90% 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforementioned products fall under headings 1101, 1102, 1103 and 1106, we would be required to go through the said Headings as appearing in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), which read, as under: 1106 FLOUR, MEAL AND POWDER OF THE DRIED LEGUMINOUS VEGETABLES OF HEADING 0713, OF SAGO OR OF ROOTS OR TUBERS OF HEADING 0714 OR OF THE PRODUCTS OF CHAPTER 8 1106 10 00- Of the dried leguminous vegetables of heading 0713 1106 20 Of sago or of roots or tubers of heading 0714: 1106 20 10--- Of sago 1106 20 20 --- Of manioc (cassava) 1106 20 90--- Of other roots and tubers 1106 30 - Of the products of Chapter 8 : 1106 30 10--- Of tamarind 1106 30 20--- Of singoda 1106 30 30--- Mango flour 1106 30 90--- Other 1101 00 00 WHEAT OR MESLIN FLOUR 1102 CEREAL FLOURS OTHER THAN THAT OF WHEAT OR MESLIN 1102 20 00 -- Maize (corn) flour 1102 90 - Other : 1102 90 10 - - - Rye flour 1102 90 90 - - - Other 1103 CEREAL GROATS, MEAL AND PELLETS - Groats and meal : 1103 11 -- Of wheat : 1103 11 10 --- Groat 1103 11 20 --- Meal 1103 13 00-- Of maize (corn) 1103 19 00 - Of other cereals 1103 20 00 - Pellets 12.2 Chapter Notes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts from the milling of wheat, rye, barley, oats, maize (corn) (including whole cobs ground with or without their husks), grain sorghum, rice and buckwheat falling in this Chapter are to be distinguished from the residues of heading 23.02 in accordance with the criteria as to starch and ash content laid down in Chapter Note 2(A).Within the Chapter, as regards the cereals mentioned by name above, the flours of heading 11.01 or 11.02 are to be distinguished from the products of heading 11.03 or 11.04 in accordance with the criterion as to passage through a sieve laid down in Chapter Note 2(B). At the same time, all cereal groats and meal of heading 11.03 must fulfil the relevant criterion as to passage through a sieve laid down in Chapter Note 3. (2) Products also obtained from the cereals of Chapter 10 by submitting them to the processes provided for in the various headings of the Chapter, such as malting or the extraction of starch or wheat gluten. (3) Products obtained by submitting raw materials of other Chapters (dried leguminous vegetables, potatoes, fruit etc.) to processes similar to those indicated in paragraph(1) or (2) above. This Chapter excludes, inter alia : (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r husks) grain sorghum, rice or buckwheat are classified in this heading as flours if they fulfil the requirements as to starch content and ash content set out in paragraph (A) of Chapter Note 2(see General Explanatory Note) and comply with the criterion of passage through a standard sieve as required by paragraph (B) of that Note. Flours of this heading may be improved by the addition of very small quantities of mineral phosphates, anti-oxidants, emulsifiers, vitamins or prepared baking powders (self raising flour). The heading also covers 'swelling' (pregelatinised) flours which have been heat treated to pregelatinise the starch. They are used for making preparations of heading 19.01, bakery improvers or animal feeds or in certain industries such as the textile or paper industries or in metallurgy( for the preparation of foundry core binders). Flours which have been further processed or had other substances added with a view to their use as food preparations are excluded (generally heading 19.01). This heading also excludes flours mixed with cocoa (heading 18.06 if they contain 40% or more by weight of cocoa calculated on a totally defatted basis, or heading 19.01, if less). 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pith(heading 0714). (b) Prepared foodstuffs known as tapioca (heading 1903). 12.5 Recently, the Government has issued Circular No.80 dated 31.12.2018 containing clarification regarding GST rate and classification of some goods in which clarification has been issued with respect to classification of Chhatua or Sattu, which is a mixture of flour of ground pulses and cereals. The purpose of this circular being discussed here is that the said circular appears to be squarely applicable in the instant case. The issue regarding classification of Chhatua or Sattu as appearing in the said Circular reads as under: 3. Applicability of GST on Chhatua or Sattu: "3.1 Doubts have been raised regarding applicability of GST on Chhatua (Known as "Sattu" in Hindi Belt). 3.2 Chhatua or Sattu is a mixture of flour of ground pulses and cereals. HSN code 1106 includes the flour, meal and powder made from peas, beans or lentils (dried leguminous vegetables falling under 0713). Such flour improved by the addition of very small amounts of additives continues to be classified under HSN code 1106. If unbranded, it attracts Nil GST (S. No. 78 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Rules for the interpretation of Customs Tariff which reads as under: "3. When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as the criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .59 of Schedule-I of the said Notification(as amended vide Notification No.27/2017-Central Tax (Rate) dated 22.09.2017, on which GST payable is 5% (2.5% CGST + 2.5% SGST) which reads as under: S.No. Chapter/Heading/ Sub-heading / Tariff item Description of goods 59 1106 Meal and powder of the dried leguminous vegetables of heading 0713 (pulses) [other than guar meal 1106 10 10 and guar gum refined split 0713], of sago or of roots or tubers of heading 0714 or of the products of Chapter 8, put up in unit container and,- (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone. 13.1 As regards the branded products mentioned at Sr.Nos.3, 5 and 6 of the list containing percentage-wise break of the flours of the ingredients involved in the products manufactured by the applicant mentioned at para 11.1 above, we find that the flour content of leguminous flour and rice flour is equal in these products. Details of the same are, as under: (a) Dhokla mix flour at Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flour (wheat granules) and would be classifiable under heading 1103 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). (ii) Muthiya mix flour containing 90% wheat flour and 10% spices and other ingredients have the essential characters of wheat flour and would be classifiable under heading 1101 of the First Schedule to the Customs Tariff Act,1975. (iii) Khichu mix flour containing 95% rice flour, 2% Sabu dana flour and 3% spices and other ingredients shows the essential characteristics of rice flour and would be classifiable under heading 1102 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). 13.3 Further, as per the Chapter notes of Chapter 11, products falling under heading 1101 to 1104 have to meet the following criteria in order to be classified under the said headings, otherwise they fall under heading 2302. Chapter notes of Chapter 11 reads as under: (A) Products from the milling of the cereals listed in the table below fall in this Chapter if they have, by weight on the dry product : (a) a starch content (determined by the modified Ewers polarimetric method) exceeding that indicated in column (2); and (b) an ash content (after deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h containing 70% of suji flour(wheat granules) and 20% of leguminous flour and 10% spices as well as Muthiya mix flour containing 90% wheat flour and 10% spices are classifiable under sub-heading 23023000 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) whereas Khichu mix flour containing 95% rice flour, 2% Sabu dana flour and 3% spices and other ingredients would be classifiable under sub-heading 23024000 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). 13.5 On going through the entry of the above product in the Notification No.01/2017-Central Tax(Rate) dated 28.06.2017(hereinafter referred to as the said notification), we find that the same appears at entry No.103A of Schedule-I of the said Notification(after amendment of the said notification vide Corrigendum No.2 dated 12.07.2017 vide which entry No.103A was inserted) on which GST payable is 5% (2.5% CGST + 2.5% SGST) which reads as under: S.No. Chapter/Heading/Sub-heading / Tariff item Description of goods 103A 2302 Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants [other than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x (Rate) dated 14.11.2017(with effect from 15.11.2017) and reads as under: S.No. Chapter/Heading/ Subheading / Tariff item Description of goods 23 2106 Food preparations not elsewhere specified or included [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods]. Further, vide the aforementioned notification, chutney powder was excluded from the above entry and Sr.100A of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 was amended with effect from 15.11.2017 wherein idli/dosa batter and chutney powder was added to roasted gram wherein GST rate involved was 5%(2.5% CGST + 2.5% SGST). The same reads as under: S.No. Chapter/Heading/ Subheading / Tariff item Description of goods 100A 2106 Roasted gram, idli/dosa batter, chutney powder 13.8 In view of the above, we conclude that chutney powder is classifiable under Sub-heading 21069099 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) on which GST rate was 18%(9% CGST + 9% SGST) upto 14.11.2017 and 5%(2.5% CGST + 2.5% SGST)with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CGST Act, 2017, which reads as under: " 'mixed supply' means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. Illustration.- A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately;" The applicant has submitted that he provides Chutney powder in a pouch along with Gota Mix and Bhajiya Mix and no extra amount is collected for such Chutney powder and that he is charging a single price for the combined supply of Gota Mix and Chutney powder or Bhajiya Mix and Chutney powder. Further, as discussed earlier, since the aforementioned supply is not a composite supply of goods and a single price is being charged for the combined supply of Gota Mix and Chutney powder or Bhajiya Mix and Chutney powder, it will be considered as a 'Mixed supply' of goods. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule to the Customs Tariff Act, 1975(51 of 1975). They appear at Entry No.59 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and the GST liability on all these products is 5%(2.5% CGST + 2.5% SGST). (2) Upma mix flour, Rava idli mix flour and Muthiya mix flour are classifiable under sub-heading 23023000 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) whereas Khichu mix flour is classifiable under sub-heading 23024000 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). They appear at Entry No.103A of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and the GST liability on these products is 5%(2.5% CGST + 2.5% SGST). (3) Chutney powder is classifiable under Sub-heading 21069099 of the First Schedule to the Customs Tariff Act, 1975(1 of 1975). The said product appeared at Entry No.23 of Schedule-III of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 till 14.11.2017 and at Entry No.100A of Schedule-I of the said notification with effect from 15.11.2017. The GST liability on the said product was 18%(9% CGST + 9% SGST) upto 14.11.2017 and 5%(2.5% CGST + 2.5% SGST)with effect from 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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