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TMI Blog2022 (12) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... lication has been filed under Section 97(1) of the Central Goods and Services Tax Act, 2017 and the Jharkhand Goods and Services Tax Act, 2017 [hereinafter referred to as "the CGST Act and JGST Act"] by H K Food Processing (P) Ltd, House No 448/ A, Ground Floor, Road NO. 4, Ashok Nagar, Ranchi - 834002, Jharkhand, India. The Company is engaged in processing of milk and milk products under the Brand name OSAM'. The applicant, seeking an advance ruling in respect of the following questions:- (a) What would be the classification of Flavoured Milk for Tea Preparation? (b) What would be the rate of GST Applicable on the said product? 2. At the outset, we would like to make it clear that the provisions of both the CGST Act and the JGST A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are : Milk and Milk Solids, Permitted Food Stablizer, tea enhancing flavour like Ginger. No sugar or sweetener is added in the products. The product "Osam Samridhi" will be sold in 1 litre polypack and will have shelf life of 1 day under prescribed storage condition. As per the submission, the product "Osam Samridhi" will help Tea Vendors to prepare milk more conveniently and will help the vendors to prepare more cups of tea and helping them to reduce the cost of vendors and increase their income. 5. The applicant submitted the percentage wise composition of the said product, which is as under: Component % of component Milk (2% Fat and 9% SNF) 99.85% Stabiliser- Xanthan Gum (E 425) - Carrageenan (E 407) 00.10% Flavour 00.05% 6. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zers. It still retains all essential characteristics of milk. Hence, it should be classified under chapter 4 only under Tariff item 0401: 20:00. 7.3 The applicant submitted that the process of Tea milk is standardization of fresh milk according to the fat contents and then heating at certain temperature followed by filtration, pasteurization and homogenization and then mixing of various stabilizers and flavours and finally packaging. The reason for adding stabilizers and flavours is to improve the texture of milk suitable for tea making and increase the taste. 7.4 The applicant submitted that the essential constituents of the milk does not change even after adding stabilizers and permitted flavours and still retain its essential character ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct consistency during storage and transportation as well as to improve the shelf life and merely because it improved the body and texture of the product and added some smoothness thereto, that would not change the basic character of the product" ANALYSIS AND FINDINGS 9. We have gone through the records of the issue as well as submissions made by the authorised representative of the applicant during the course of personal hearing. The issue involved in this case pertains to 'Classification of goods and late of GST on said product (Flavoured Milk for tea Preparation)'. 10. We have considered the submissions made by the Applicant in their application for Advance Ruling during Personal Hearing/ Video Conferencing. We also consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative further reiterated that the product shall be sold unlike any other milk in plastic bags and has also submitted the sample proforma of the packaging. The said packaging is in a polypack and it is not in any form of tetra pack nor does it have any slot in the packing in which the straw can be inserted. We find that the Hon'ble Allahabad High Court in the case of Gujrat Coop Milk Marketing Federation Ltd. Vs State of U.P. 2017 (5) GSTL 351 (All): 2017 Tax Pub (ST) 1622 has held that: "Flavoured Milk is a form of milk as it is neither a derivative of the milk or a milk product. It is like hot and cold milk which remains milk even if sugar is added to it. It does not lose its basic characters of milk by heating or cooling or add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it juice beer) usually prepared (as by flavouring, heating, admixing) before being consumed. The Instant Product, "flavoured milk for Tea Preparation" can't be consumed instantly and it does not contains any additives like sugar or sweeteners for direct consumption. It is moreover, a 'preparation' made as per the description given by the applicant in the flow chart submitted by them. The applicant's product was found to be "Tea Milk" rather than 'Flavoured Milk for Tea Preparation' from which Tea shall be prepared. The final product Tea can be said to be a beverage but not the raw material i.e. "Tea Milk". In view of the above, we find that the product of the applicant, mentioned above, is appropriately classifiabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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