TMI Blog2023 (1) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with the Customs Tariff Act, 1975, which in turn is based on Harmonized System of Nomenclature, popularly known as 'HSN'. The rules of interpretation, section notes and chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for classification of Goods under GST regime. However, once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST by the respective Governments. As per the Oxford Dictionary beverage means a type of drink except water. The word 'beverage' though not defined under the CGST Act, 2017, is considered, in common parlance, as a drink that can be consumed directly and the instant product `Jigarthanda can be consumed as it is and hence is a beverage with a basis of milk. Further, on conjoint reading of Chapter heading 0402 and 2202 and relevant explanatory notes, it is clear that milk flavoured with cocoa or other substances are specifically excluded from Chapter heading 0402 and included under Chapter heading 2202. Various ingredients prepared and packed separately are sold and invoiced to dealers and out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. MADURAI FAMOUS JIGARTHANDA LLP, No.4/799, Thasildhar Nagar, Vandiyur, Madurai-625020 (hereinafter called the Applicant) are registered under GST with GSTIN:33ABMFM3879J1ZP. The applicant has sought Advance Ruling on the following questions: 1. Whether the product manufactured as pasteurized milk and milk cream but named Jigarthanda can be classified as Jigarthanda under description of goods? 2. Is the goods taxable or exempted? 3. If exempted, HSN of the product and rate of tax on product. 4. If taxable, HSN of the product and rate of tax on product. 1.2 The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they are manufacturing dairy products in the name of Jigarthanda packed in unit contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garthanda iii. Basundhi ( Palaadai -milk cream) 3.3 They have stated that their product is sold under the name JIGARTHANDA , where it was named by their ancestor who had prepared JIGARTHANDA during their olden days. The manufacturing process involves the following steps: i. Receiving raw milk in silos ii. Pasteurization: Raw milk that has been heated to a specified temperature and time to kill pathogens that may be found in the raw milk (90 c for 10minutes) iii. Sugar Syrup Preparation: Sugar and nannari syrup are added in boiling water which is made to boil for some time to make the sugar syrup. This is for sweetening and flavoring the `Jigarthanda' iv. Milk cream (Basundhi-Paaladai) preparation: Pasteurized milk is boiled for collecting fresh milk cream. This process is done continuously for preparing basundhi-palaadai. v. Badam pisin: It is soaked for some time in clean water which will become as a suitable substance for further preparation of Jigarthanda vi. Chilling/texturizing storage (below 5 C) vii. Packing: packed in unit container i.e Vacuum pouch and also in loose form viii. Dispatch through refrigerated van 3.4 Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; as it is excluded as per the Explanatory Notes to Chapter 22 of HSN; the ratio of ingredients in Jigarthanda is Milk cream 50%, Badam Pisin 35% and Pasteurized milk added with sugar and nannari syrup 15%; since, Milk cream and Badam Pision are in solid consistency, pasteurized milk is added to make it semi solid; Sugar, Milk cream, Badam Pisin, Nannari and Milkkova attract 5% GST and Milk 0% GST are mixed toghther and served as Jigarthanda would qualify as 'mixed supply and attract 5% GST. Currently, 5% GST is being collected on 1. Jigarthanda, 2. Jigarthanda with Milkkova scoop and 3. Basundhi (Milk Cream - Paladai). 4. The Centre Jurisdictional Authority, Madurai Commissionerate, who has administrative jurisdiction over the applicant was addressed vide this office letter dated 22.04.2022 requiring to furnish comments on the issue raised by the applicant and report whether any proceedings are pending on the issue in respect of the applicant. The said authority has stated that no proceedings in the applicant's case on the issues raised by the applicant are pending and not offered any comments on the issues raised by the applicant. 5. The State Jurisdictional Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds under GST regime has to be done in accordance with the Customs Tariff Act, 1975, which in turn is based on Harmonized System of Nomenclature, popularly known as 'HSN'. The rules of interpretation, section notes and chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for classification of Goods under GST regime. However, once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST by the respective Governments. 8.3 The applicant has claimed that `Jigarthanda' is pasteurized milk with added sugar-nannari syrup, patham-pisin and milk cream (paladai) classifiable under HSN 0402 of Customs Tariff Act, 1975, which is reproduced below: 0402 MILK 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 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, 0402.21 and 0402.29: These sub-headings do not cover concentrated milk or cream in the form of paste (sub-headings 0402.91 and 0402.99). 8.4 From the explanatory notes, which is a guide to understand the scope of the entries, it is seen that above heading covers milk as defined in Note 1 to this chapter and means full cream milk or partially / completely skimmed milk. The production process of Jigarthanda submitted by the applicant indicates that pasteurized milk is added with various ingredients, such as badam pisin, milk cream (basundi), milk kova, sugar syrup obtained by nannari syrup added in boiling water with sugar for flavor and sweetener. Therefore, 'Milk and Cream' referred to in HSN 0402 and Jigarthanda manufactured by the applicant are not the same and on this ground alone the product Jigarthanda is not covered under HSN 0402. Further, the relevant explanatory notes of CTH 0402 of the HSN clearly state that beverages consisting of milk flavoured with cocoa or other substances is specifically excluded from this chapter heading. 8.5 The applicant categorically stated that their product Jigarthanda is not fermented milk, but pasteurized milk produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquid for drinking especially such liquid other than water (as tea, milk, fruit juice, beer) usually prepared (as by flavouring, heating, admixing) before being consumed . As per the Oxford Dictionary beverage means a type of drink except water. The word 'beverage' though not defined under the CGST Act, 2017, is considered, in common parlance, as a drink that can be consumed directly and the instant product `Jigarthanda can be consumed as it is and hence is a beverage with a basis of milk. Further, on conjoint reading of Chapter heading 0402 and 2202 and relevant explanatory notes, it is clear that milk flavoured with cocoa or other substances are specifically excluded from Chapter heading 0402 and included under Chapter heading 2202. 8.8 Various ingredients prepared and packed separately are sold and invoiced to dealers and outlets as Jigarthanda in units of liter and the same are mixed at the retail outlet as a cold beverage before sale to customers / consumers. Therefore, various ingredients cannot be classified as such and treated as mixed supply as claimed by the applicant. The goods has to be classified on the basis and form in which it is bought and sold in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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