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TMI Blog2024 (6) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ant'] against the Advance Ruling No. Guj/GAAR/R/32/2021 dated 30.7.2021, passed by the Gujarat Authority for Advance Ruling [GAAR] 3. The facts briefly are that the appellant is a supplier of Khaman flour, Gota flour, Dalwada flour, Dahiwada flour, Dhokla flour, Idli flour and Dosa flour in a unit container bearing brand name of 'KITCHEN XPRESS'. 4. Before the GAAR, the appellant submitted that the below mentioned process is undertaken for manufacturing & selling the above products, viz: (a) They purchase food grains and pulses from open market. (b) These pulses are then sorted, cleaned and then sent to grinding machine. (c) Pulses are grinded into flour in grinding machine for e.g. where Grams are purchased, it results into gram flour consequent to grinding process. In certain cases, the appellant also purchases grinded flour directly from the vendors. (d) Certain spices are mixed in flour and such mixed flour is packed in various packings. (e) Lastly, a small packet of spices necessary to prepare food item is supplied in pouch with packing of flour for added taste. (f) Mixed flour (commercially known as 'Instant Mix Flour') is sold to consumers in open market or thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20% - 20% - 16% 59% 75% 95% 5% 7. The appellant further submitted that the composition and ingredients contained in the different types of flours does not contain the Maize flour or Wheat flour and hence, sells this flour under the HSN code 1106 wherein the GST is charged @ 2.5% CGST and 2.5% SGST. 8. Relying on the VAT determination orders, passed in the earlier VAT regime, the appellant further stated that the appropriate HSN and GST rate for the products under the consideration ought to be as under: Sr. No. Product HSN Code Rate Ingredients 1 Gota Flour 1106 5% The said instant mixed flour is prepared from the Cereal and pulse only; * The said products are related to milling industry. * Followed legacy of classifying the products as 'mixed flour' as applied in vat regime (relied on Tax Determination 2 Khaman Flour 3 Dalwada Flour 4 Dahi-wada Flour 5 Dhokla Flour 6 Idli Flour 7 Dosa Flour 9. Before the GAAR, the appellant also submitted that the said flour cannot be treated as ready to eat which can be classified under the heading 2106 owing to the following reasons: (a) The said mixed flour sold to customers are not in of ready to eat fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi Wada flour, Dhokla flour, Idli flour and Dosa flour are flours with some added spices and are not ready to eat products and does not fall under HSN code 2106. 12. In view of the foregoing, the appellant raised the following question before the GAAR viz: Under which Chapter, Tariff Heading and HSN, the different varieties of Flours i.e. Gota Flour, Khaman Flour, Dalwada Flour, Dahiwada Flour, Dhokla Flour, Idli Flour and Dosa Flour manufactured and supplied by applicant will attract CGST/SGST? Vide the aforementioned impugned order dated 30.7.2021, the GAAR ruled as follows viz: The products i.e. i. Gota Flour ii. Khaman Flour iii. Dalwada Flour iv. Dahiwada Flour v. Dhokla Flour vi. Idli Flour and vii. Dosa Flour are classifiable under HSN 2106 90(Others) attracting 18% GST (9% CGST + 9% SGST) as per SI. No. 23 of Schedule-Ill to the Notification No. 01/2017-Central Tax (Rate) dated 28-6-2017. 14. For arriving at the aforementioned ruling, the GAAR, gave the below mentioned findings viz: * The supply of edible food items-Khaman, Gota, Dalwada, Dahiwada, Dhokla, Idli and Dosa by the hotels and restaurants as a part of restaurant service is different than the supply of 'i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification No. 1/2017-Central Tax, as amended or in any of the entries of notification No. 2/2017-Central Tax. 15. Feeling aggrieved, the appellant is before us i.e. Gujarat Appellate Authority for Advance Ruling [GAAAR] raising the following averments viz * that the GAAR erred in not considering that the goods supplied are of a nature that one can easily recognize as flour & not instant mix; * the GAAR classified the goods under 210690 which is not correct as there is a specific head ie 1102 or 1106 for the goods in question; that the GAAR failed to apply the General Rules for Interpretation for classification of the goods, which is legally not correct; * that the products of the appellant are considered as instant, whereas it is not an instant food; that it is ready to cook food and not ready to eat food', * that GAAR erred in differing the flours of the appellant from Satin despite various similarities; * that the appellant's submission before the GAAR was not fully considered. In view of the aforementioned averments, the appellant stated that the seven products under question would fall under the heading 1102 or 1106 and should be charged to tax @ of 5% [2.5% CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this claim, we think it prudent to reproduce the explanatory notes of both HSN 1102 and 1106, viz 11.02 11.02 - Cereal flours other than of wheat or meslin. 1102.20 - Maize (com) flour 1102.90 - Other This heading covers flours (i.e., the pulverised products obtained by milling the cereals of Chapter 10) other than flours of wheat or meslin. Products of the milling of rye, barley, oats, maize (com) (including whole cobs ground with or without their husks) grain sorghum, nee 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng does not cover tamarind powder in packings for retail sale for prophylactic or therapeutic purposes (heading 30.04). Products of this heading may be improved by the addition of very small amounts of anti-oxidants or emulsifiers. The heading also excludes : (a) Sago pith (heading 0744). (b) Prepared foodstuffs known as tapioca (heading 19.03). We find that the flours may remain classified in Chapter Heading 11.01 or 11.02, if the flour has been improved by the addition of very small quantities of specified substances. However, if other substances (other than specified substances) are added to the flours with a view to use as 'food preparations', then the same gets excluded from the Chapter Heading 11.01 or 11.02, Further, various products being supplied by the appellant contain spices and other ingredients apart from flour of dried leguminous vegetables, rice and wheat, in different proportions. The spices and other ingredients contained in these products include sugar, iodised salt, red chili powder, garam masala raising agent [INS 500(ii)], black pepper, coriander, ajwain, fennel, acidity regulator. These spices and ingredients are other than those substances mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Chapter Heading 11.06 or the relevant explanatory notes of HSN, we find that the said products are not covered under Chapter Heading 11.06. 21.1 Though the appellant before us has contended that his goods merit classification under 1102 or 1106, we find that before the GAAR, he had stated that his claim of the goods falling under 1102 was a typographical mistake. We reproduce the relevant para 1 of the impugned order dated 30.7.2021, for case of reference viz 11. The applicant further submitted that in application for the Advance Ruling filed with the authority, the clarification has been sought for item falling under HSN Code 1102. is in fact typographical mistake that the HSN code has been mentioned in the application was 1102 instead of applicable HSN Code 1106. Accordingly, it is prayed that the modification in the original application be considered for HSN code 1106 and accordingly, wherever HSN code 1102 is mentioned, it should be treated as HSN Code 1106. 22. The appellant's next submission is that the impugned order wrongly differs their flours from 'Sattu'. The appellant has relied upon CBIC's circular No. 80/54/2018-GST dated 31.12.2018 to substantiate his averment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Protein concentrates and textured protein substances 2106.90 - Other Provided that they are not covered by any other heading of the Nomenclature, this heading covers: (A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption. (B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.) (sec the General Explanatory Note to Chapter 38). However, the beading does not cover enzymatic preparations containing foodstuffs (e.g., meat tenderisers consisting of a proteolytic enzyme with added dextrose or other foodstuffs). Such preparations fall in heading 35.07 provided that they are not covered by a more specific heading m the Nomenclature. As is evident from the explanatory notes, it covers food preparations not elsewher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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