Dismissed

M/s. Kitchen express overseas Ltd.

GST AAAR29 May 2024GUJ/GAAAR/APPEAL/2024/01

Case brief

AI extract

What is this about?

The Appellate Authority dismissed the appeal filed by M/s. KitchenExpress Overseas Ltd against an Advance Ruling. The court upheld the classification of their instant mix flour products under HSN 2106 90 99 as food preparations, rejecting the classification as flour under Chapter 11 due to added spices and ingredients.

What did the court decide?

The appeal filed against the Advance Ruling was rejected; the ruling classifying products under HSN 2106 90 99 at 18% GST was upheld.

M/s. Kitchen express overseas Ltd. — GST and Indirect Tax | GST AAAR (2024)

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GUJARAT APPELLATE AUTHORITY FOR ADVANCE RULING

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GOODS AND SERVICES TAX

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D/5, RAJYA KAR BHAVAN,ASHRAM ROAD,

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,tfl" Y.MABITT

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AHMEDABAD:380009

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ADVANCE RULING(APPEAL) NO. GUJ/G A.A.AIV AI'PE AL I 202 4 I 0 I (IN APPI-ICATION NO. Advance Ruling/SGST &CGST /2021 I A1</ 22)

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	Datc:21.052024
Nameandaddressofthe appellant	M/s. KitchenExpress OverseasLtd, 291/P,Santej-Vadsar Road, OppositePrashPackPvtLtd., Santej,TalukaKalol-382721, Gandhinagar,Gujarat.
GSTINof the appellant	24AADCK1847P.I73
JurisdictionOffice	Officeofthe Assistant Commissionerol'Statc Tax,Unit-5,Division-1,,Range-2, Ahmedabad.
Advance Date RulingNo.and	Guj/GAAR/R/3212021d,ated 30.7.2021
Dateofappeal	1i.9.2021
DateofPersonalIlearing	20.02.2024
Presentlorthc appcllant	ShriBKPatel,CAand Shri DenishMavani, CA

¶9

At the outset we would like to make it clear that the provisions ol'thc Central Goods and Services Tax Act, 2017 and Guj arat Goods and Services'l'ax Act, 2017 (hereinafter referred to as the'CGST Act,2017'and'GGST Act, 2017') arc pari materia and have the same provisions in like matter and differ from cach othcr only on a lew specific provisions. Therefore, unless a mention is particularly rnadc to such dissimilar provisions, a reference to the CGST Act,2017 would also mcan reference to the corresponding similar provisions in the GGS'I Act,2017 .

¶10

1'he present appeal has been filed under section 100 of the CGS'I'Act, 2017 and, the GGS'I Act,2017 by M/s. Kitchen Express Overseas Ltd,29ll,, SantcjVadsar Road, Opposite Prash Pack Pvt Ltd., Santej, Taluka Kalol- 382 121 , Gandhinagar, Gujarat [hereinafter referred to as 'appellant'] against thc Advancc I{uling No. Guj/GAAR/R/3212021 dated30.7.2021, passed by the Gujarat Authority for Advance I{uling [GAAR].

¶11

J 'l'he lacts bricfly are that the appellant is a supplier of Khaman llour, (lota f1our, Dalwada I'lour, Dahiwada ilour, Dhokla flour, Idli flour and l)osa ll a unit containcr bcaring brand name of 'KITCI{EN XPI{ESS'.

Page I of 12

llclbrc thc GAAIi., thc appcllant submitted that the bclow mentioned

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process is underlakcn fior manufacturing & selling the above products, viz:

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(a)^'l'hey purchase lood grains and pulses from open market.

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(b)'l'hesc pulses are then sorted, cleaned and then sent to grinding machine.

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(c) Pulscs arc grindcd into flour in grinding machine for e.g. where Glams arc purchascd, it results into gram flour consequent to grinding process. In cerlain cascs, thc appellant also purchases grinded flour directly from the vendors. (d) Cerrain spiccs are mixed in flour and such mixed flour is packed in various packings.

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(c) Lastly, a small packet olspices necessary to prepare food itcm is supplied in pouch with packing of flour for added taste.

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(l) Mixcd llour (comrnercially known as 'Instant Mix lilour') is sold to consurrcrs in opcn markct or through distributors.

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(g) Iind consurner of such instant mix flour is required to follow certain food prcparation proccss beforc such product can be consumed as an eatable.

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(h) IIcncc, it is the applicant's case that instant mix flour cannot be consumed as such, but is rcquired to undergo certain cooking procedures befbrc consumption.^'l'hus, the product manufactured and sold is not 'ready to cat' but can be said to be 'ready to cook'.

¶24

'l-he appellant, before the GAAR also submitted the dctails of raw

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rnaterials used in various products v2:

¶26

Sr.	Product	Ingrcdicnts I
No.
I	Gotaflour	(inpowderlorm) ChickPeasFlour,Sugar,Wheat Irlour, Iodiscd Salt,RedChilli'GaramMasalaRaising Agent [(lNS^{500(ii)],BlackPepper,Coriander,Ajwain,Fennel,} AcidityRegulator(INS330). ChutneyPowder:Sugar,DryMangoPowder, Salt,Red ChilIi,Cumin,,Coriander, Acidi Re ulator rNS330)
)	Kharnanl-lour	(inpowderform)-BengalGramDal,SugaqIodisedSalt, ILaisingAgent[(lNS500(ii)],AcidityRegulator (lNS 330
3	t- Dalwadaflour	(rNS500 ll Acidit Re ulator (inpowderform)-Green GramDal, IodisedSatt,Raising (rNS330).
4	lD al.ri-wada 1'lour	(inpowdcr form)- BlackGramDal,Green GrarnDal, Iodiscd Salt,RaisingAgent[(INS500(ii)],Acidity Ilc r.rlator INS330). (
5	Dhoklallour	(inpowderform)-Rice, Bengal GramDal,BlackGrarn Dal,lodisedSalt, RaisingAgent [(INS 500(ii)],Acidity I{c INS330 r
6	Idlillour	(inpowderform)-Rice,BlackGramDal,IodiscdSalt, Ilaising Agent[(lNS500(ii)],AcidityRegulator (lNS ?^jq),
l	Dosallour	__ llc ulator INS330

¶27

6 'l'hc pcrccntagc-wise break-up of the flours and other ingredi submitted before the GAAR, arc as follows: I

*"w

Page 2 of 12

Sr. No	Product	Chana Dal	Udad dal	Moong Dal	Total of legumi- nous flours	Suji flour	Wheal iour	Rice flour	Tolal of Rice flours/ Wheat flours	Total flours	Spicesand other ingredients
1	Gota Flour	67"/"			67"/"	6'/			6"/"		27%
2	Khaman Flour	IJ'/1			130/a I		I	I I		73"/"
3	Dalwada Flour			93%	93%					93%	70/a
4	Dahi-/{ada Flour		86%	o'a/-	940/a		I	I I	0%	94"/"	6%
5	Dhokla Flour		12%					66%	66%	93%	I
6	ldliFlour		27"/"		270/a I			66%	669i	93%	70/a
7	Dosa Flour		20/"		20"/"		164/"	59%	75%	95'/"	5va

¶32

7 . The appellant further submitted that the composition and ingrcdicnts contained in the different lypes of flours does not contain the Maize flour or Wheat flour and hence, sells this flour under the HSN code 1 106 whcrcin thc GST is chargcd @2.5%^{CGS'I'and2.5%SGST.}

¶33

Relying on the VAI determination orders, passed in thc carlier VAIrcgime, the appellant further stated that the appropriatc I ISN and^(jS'l' rate lbr thc products under the considcration ought to be as under:

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Sr. No.	Procluct	HSN Code	Rate	Ingreclients
I	GotaF-lour	1106	5,,1,	Thesaiclinstantmixedflouris rearedfromtheCerealand
,)	I(hamanFlour			pp pulse only;
3	DahvaclaFlour			. Thesaiclproductsare related tomillin industr
.+	Dahi-rr'ariaFIour			g y. . Follorved legacyof
)	DhoklaFlour			classifying the productsas 'mkeclflour'asaliecl in
a)	IdliFlour			pp vatregime{reliedonTax
	DosaF-lour			DeterminationOrders passedunderVATActas mentioned hereinabove)

¶35

Beforc the GAAI{, the appcllant also submitlcd thal thc said llour cannot be treated as ready to eat which can be classif.ied under the heading 2106 owing to the following reasons:

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(a)^'I'hc said mixed flour sold to customcrs are not in ol ready to eat forrn; (b) For preparing various Indian dishcs, consumer has to carry out proccss prescribed on food packet such as boiling, lrying or cooking ctc. lbr preparation and consumption.

¶37

Ilcnce, thc appcllant bclirrc the GAAR concludcd that it is clear that Kharnan lloLrr, (lota flour, I)al Wada f'lour, Dahi Wada flour, I)hokla 1'lour', ldli llour and

Page 3 of 12

are not ready to cat products but is l.lour which is mixed with certain spices which makc it ready to cook and not ready to eat.

¶43

T'hc appcllant further submitted before the GAAR, as under:

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(i) I'}roduct manulactured and supplied by them are merely flour ol

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larsan dishes and not ready to eat food preparation;

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(ii)^'l'hc llour ol thc l-arsan such as Khaman, Dahi Wada, Gota, Dal Wada, I)hokla etc. should not be taxablc at a rate higher than thc rate at which, rcady 1o cat prcpared farsan is laxable;

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(iii) lrarsan /prcparations of products under consideration when served rcady to eat in market /restaurants/food shops, is taxed @ of 5% (2.5Yo+2.5%);

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(iv) Logically, it is consumed by the customer due to various rcasons such as;

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good quality of raw materials supplied;

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. hygienic preparation as compared to hotels, restaurants or food shops etc.;

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. convenience to prepare fresh and eat at home at any time by normal cooking process;

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. tastc of our products remains samc in all services.

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(v) I)rodr.rcts undcr considcration arc sir-r-rilar to "Sattu" or "Chhatua" wh i ch is chargcabl c^(@ o l 5% (25%+2.5%). "Sattu" or "Chhatua" madc ol- llour mixed with spiccs, pulses etc. is a similar product and therefore thcir products also nccds to be classificd undel the heading 1106.

¶54

( vi ) I'roducls undcr consideration are known as flour of farsan/namkecn

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ir-r common parlancc.'l'hcrcfore, considcring it as instant or ready to eat lood prcparation, will bc dilferent than its actual identification. Hencc, thc classification should be under chapter 11, more specifically 1106 and should bc charged by rate ol 5oh (2.5%+2.5%).

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(vi)^'l'hc basic charactcr of the products remains "flour" cvcn aftcr addition of spices and salt in very small amount of quantity.

¶57

It. -I'hc appcllant, in his avcrmcnt before the GAAR further stated that:

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(i)^'l'he flour falls under the HSN codc I 106;

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(ii)'l'he tax ratc in the GST regime shall be as per tariff rate under HSN codc I 106 i.e. 5Yo (2.5% CGST + 2.5yo SGST);

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(iii)'l'he Khaman ilour, Gota flour, Dal Wada flour, Dahi Wada flour, I)hokla flour, Idli llour and Dosa flour are flours with some addcd spices and are not rcady to eat products and does not fall under HSN codc 2l06.

¶61

In vicw ol'thc lbregoing, thc appellant raiscd thc following qucstion bcfore ir-1 thc^(iAAIl r,r::

til ir-1 ,i oi

Page 4 of 12

Under which Chapter, Tariff Heading and IISN, the diflbrent varieties rlf Iilours i.e. Gota Flour, Khaman Flour Dalwada l;lour l)ahiwada l;'lour, Dhokla Flour ldli Flour and Dosa Flour monufttctured and supplied b.1, applicant will attract CGST/SGST?

¶66

Vide the aforementioned impugned order datcd 30.1 .2021, the GAAI{ ruled as follows v2:

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'l'he products i.e. i. Gota Flour ii. Khaman Ilour iii. Dalwada Flour iv. Dahiwada Flour v. Dhokla Flour vi. Idli Flour and vii. I)osa Flour arc classifiable under HSN 2106 9O(Othcrs) attracting 18% GS'l'(9% CGS'I'+ 9% SGST) as per Sl. No. 23 of Schedule-lll to thc Notificalion No. 0ll2}l7Central Tax (Itate) dated28-6-2011 .

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For arriving at the aforementioned ruling, the GAAI{, gave the bclow mentioned findings viz:

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'l.he supply o1'edible food items- Khar.nan, Gota, I)alwada, I)ahiwada, I)hol<la. Idli and Dosa by the holcls and restaurants as a pan of rcstaurant servicc is dillerent than the supply ol-'instanl rnix'as goods; that thc classillcation is to be done based on HSN.

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t On inspection, it is observed that each packet is markcd as 'lnstant Mix'; that; lbr the packct of Kharnan 'Instant Mix' is not rnarked; that the list ol' inglcdients and preparation of cooking mentioned in thc kharnan l1our packct. is similar to the other products & hcncc, it appcars that thc said product too I'alls under the category of 'Instant Mix'. On cxamination of thc list o1' ingredients, the proportion of spices and other ingrcdicnts contained in lhcsc products ranges from 5oA to 27yo. As the products of the appellant contain spices and other ingrcdients in differcnt proporlions, which arc not rrcntioncd in the chaptcr heading 11.06 or thc rclcvant cxplanatory nolcs of I{SN, thc said products arc not covercd under chapter heading I 106.

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a that CBIC Circular No. 80/541201S-GSI' datcd 3 I . I 2.2018 is not applicablc in present case as the products of thc appellant arc dill'crcn1 ll'om Saltu and havc spices and ingredients in varying proportions and arc in thc naturc ol instant mix; that GAAR is not inclincd to admit C'l'l I 1106 fbr said products;

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a that chapter heading 21 06 is not confined to proccssed or scmi processcd food, cooked or scmi cooked food, prescrvcd food and rcady to cat lbod. In fact. any product which is a food preparation and which is not clscwhere spccilicd or included in the Customs Tariff Act, 1975, gets covcred undcr I ISN 21 06;

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a that the application mentions that products arc cornmercially known as Instant Mix Flour; that there is no merit to trcat the subjccr goods as flour. As lhcsc products arc not specifically mentioned under any spccific tarilf item ol- I ISN 2106, the products merit classification under thc rcsidual cnlry 'olher' at I ISN 21069099; that the 7 products olMix Ilour/lnsrant Mix Ilour arc appropriarclv classifiablc undcr HSN 2106.

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a 'l'hus, 'Food prcparalions not elsewhcrc specilied or includcd' lalling Lrndcr chapter heading 2106 are covered under thc al'orcsaid entry a1 Sr. No. 23 o1Schedule-Ill of notification No. 1/2017-Central^'l'ax, as amcndcd, attracting GST @ 18% (CGST 9% + 5651'9Yo);that nonc olrhc aforcsaid 7 products ol various Instant Mix/I{cady Mix flour being supplicd by thc appell tl-re products which havc been excludcd from thc cntry at Sr. N Schedule-lll or have becn specifically includcd in any other cntry

CRrI "/}

Page 5 of 12

Schcdule olnotiflcation No. l/2017-Central fax, as amended or in any of rhe cntrics of notillcation No. 2/20 I 7-Central^'['ax.

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I5. Feeling aggricved, thc appellant is before us re Gujarat Appcllate Authority lor Advancc Ituling IGAAAI! raising the lollowing averments yL

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a that thc GAAIi crcd in not considcring that the goods supplied are of a naturc that one can easily recognize as flour & not instant mix;

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a the GAAIT classified the goods undcr 210690 which is not corrcct as therc is a specific head ie 1102 or I 106 for the goods in question; that the GAAI{ failed to apply the Gcneral Rules for Interpretation lbr classillcation of the goods, which is legally not correct;

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that the producls 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

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food;

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that GAAII crrcd in dilfering thc llours of the appellant from Satlu dcspitc various similarities;

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a thar thc appellant's submission bclbre the GAAR was not lully considcrcd.

¶87

In vicw of thc aforemcntioned avcrmcnts,, the appcllant stated that the seven products undcr question would lall under thc heading I I 02 or 1 106 and should be charged to tax Ql. <'tl-5Yo [2.5% CGS'| & 2.5 % SGST].

¶88

Pcrsonal hcaring in thc matter was held on 20.2.2024 wherein Shri B K I'atcl, CA and Shri I)cnish Mavani, CA, appearcd on behalf of the appellant. IIc rcilcralcd the wriltcn submissions made in the appcal.

¶89

We have carclully gone through and considered the appeal filed by the appcllant, thcir writtcn submission, oral submissions made during the course ol' personal hcaring and thc irnpugned order.

¶90

'l'hc issue involved in this case is regarding proper classification of thc pr<rducts viz (i) Gota ltour (ii) Khaman flour (iii) Dalwada flour (iv) Dahiwada flour (v) Dhokla flour (vi) ldli flour (vii) Dosa flour and applicable rate of GST on these producls. As is alrcady rncntioncd supra, G Ar\R has held that the aforementioned products are to bc classilicd under llSN 210690 (Other) atlracting l8% GS'l'(9% CGSI'and 9% SGS'I') in terms olSl. No.23 of'Schedule-lll of notification No. 1 /20 I 7 -C' l' (llate) datcd 28.6.20 I 7 .

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19 I'he appcllant's primary claim is that thcir producls are in the n flours and no1 instant rnix and that it should fall under IIS code 1102. O

li t

Page 6 of 12

rr"{

through para 2(A) ofthe explanatory notes ofHSN for Chapter 11, it is observcd that the products from the milling of the cereals listed in the table^(wheat and ryc, barley, oats, maize and grain, sorghum, rice, buckwheat) fall in this chapter ilthcy satisfy some characteristics. Further, in terms of para 2(B) of the explanatory notcs of IISN for Chapter 11., products falling in this Chapter under the provisions ol-para 2(A) shall be classified in Heading 1 1.01 or I 1.02, if the percentage passing through a woven metal wire cloth sieve with the aperture of 315 micro meters (microns) / 500 micro rnelers (microns) is not less, by weight than that shown against thc ccrcal conccrncd, otherwise, they fall in heading I I .03 or I 1.04. It has also been inter-alia mentioned that this Chapter includes products obtained by submitting raw matcrials ol other Chapters (dried leguminous vegetables, potaloes, fruit, etc.) to proccsscs sirnilar to those indicated in paragraph ( I ) or (2) mentioned therein.^'l-hus, thc products lrom the milling of the cereals, dried leguminous products etc. arc covcrcd in Chaptcr l1 of the Customs Tariff Act, 1975.

¶97

The appellant also claims that their product was effoneously classilicd undcr 2106 09 when it should have been classified undcr I 102 or 1 106.^'lb cxanrinc tl.ris claim, we think it prudent to reproducc the explanatory notes of both I ISN I 102 and I106, viz

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I1.02

¶99

11.02 - Cered nourr otltcr thrlt ofwhcrt or m.dln.

¶100

1102.20 - Maizc (com) flour

¶101

1102.90 - Other

¶102

This hcodgrg covers flo-un (i,c,, the pulvcriscd producu obtaincd - by milling thc ccr.sls of Chaptc( l0) oabcr ahrn 0oqrs ofwhcafor rpslin.

¶103

Producs of tlE milling of rye, barley, oats, rnaizc (com) (including wholc cobs gound with or wrtho-ut- thcir b,'sLs) grain sorghur4 rice or buckwhcal arc classific? in this heading as 0ours if tbsy fulfil tbc Equirsmcnls ss to $arch cootat 8nd 8sh conrcllt sct out in Daraq-aDh (A) of Chapt Notc 2 (scc Gcncral Explanatory Not!) and comply with rhc cri6rio; oT passagc through a standard sicvc as rcquircil by parigraptr @1of ttrat ltorc.

¶104

Flours of this hcading may be improvcd by thc addition of vcry small quanritics of mincral phosphatcs, anti{xidauts, crnulsificrs, vita-mins or prcparcd baking powdcrs (self-raising flour). Tbc hcadiDg slso covc6 " swclling " (prcgelatinised) flours which havc been hear treated to prcgelatinisc tbc atrrch. Tbcy arc- usd l-or makinc DrcDarations of headine 19.01. bakcrv ,mprovers or uim8l fccds or'in ccr,aia ioduso-ics srlcti as rhc tcxtilc or pag*r-industic or iir mctallurgy (for thc prcgnrarion of foundry corr bind6s).

¶105

Flours rrhjch hrvc bcco i[t]rcr proccsscd or had othcr substrDccs lddcd with a vicw to t]rcL usc es lbod [email protected] GrEcrally b.rdhg f 9.01).

¶106

Tltc b.sdinS.lro .rdud.. tlours Frxcd with oocoa (bcrdhs 1t.06 if thcy c.nt:lE 40 % o, Epr! by wcrSll otcooot c.kuhbd oa I tohlly drfrtr.d breis, oi b._rdlo8 t9.0! iflcss).

IITORi

PaBe 7 of Lz

I I.06 - Flour, mcrl rnd powder of the drlcd lcqurnlnou! vcsatrbles of hcedlng 07.13. of meo or of rooc or tubers of herdlng 07.14 oi of the prodicts of Chrpt€r 8.-

¶111

I I06.10 - Of thc dried leguminous vcgctablcs ofheading 07.13

¶112

I I06.20 - Ofsago or of roots or rubcrs ofhcadlng 07.14

¶113

I106.30 - Ofthc producs ofChaptcr 8

¶114

(A) Flour, mcal rnd powder ofthe drlcd legumlnous vegctrblcr ofhcrdlng 07.13,

¶115

This bcading inc-ludcs tbe flour, mcal and powdcr madc from pcat, bcans or lcntils; tbey are rDatnly uscd lor prepar"d soups or pur6cs.

¶116

Tlrc hcadlng docr oor covcr :

¶117

(a) Noa{cfattcd soy! flour (hcldlng t2.06).

¶118

O)^Locustbc!, flour^(heading 12.12).

¶119

¶120

(B) Flour, merl and powd€r of srgo or of roots or tubcrr of heading 07.14.

¶121

These oroducts arc obtaincd bv lhc simole srindinq or sratina of rhe nirh of the saco Dalm or of tfie dricd rmts ofOe mairioc- ctc.'Soffc offiasc^"oroduits arc ohcn subicctcd'to'hear treatment in t-b. couse of manufatturc to climinatc trixic substanccs; this deatncat may entail pregelatinisation of $e surch.

¶122

Thc bcading dots not cover starcics obtriacd from tbcsc sourccs (it sborld bc notcd tbat tbc starch obtarucd &om s!!o is soEctiEs callcd " saco flolll'1. Thrsc stsrches hll in hadlDq 11.08 lnd crn bc distingursH-&om thc flows of thrr h&aing, b6crusc 0ours, unlikc surcbcs,?o oot cracklc yhcl -!Ed bdr&..n tlc fifl8lrs. Pcllctiicd 0our, tDcal ui pocdcr of slgo or of roots or rubcrs of helditrg 07.14 lrc dso crdud.d (hctdlng 07.1,1).

¶123

¶124

Thc principal fruits or nuts of Chsptcr 8 which arc rnsdc into flours, rncals or powdcrs arc cbestnuls, almonds, datcs, bananas;coconuts and urn ,rinds.

¶125

Thc heading also includes flour, mcal aod powdcr ofpccl of fruits.

¶126

Howcycr, thc hcEdrng do€s trot covcr tom&rind powd.f in prckings for rcuil slla for plophylaclic or thcrapcutic purpo6cs (berding 30.(N).

¶127

Producs of this hcading 6ay bc inprovcd by thc addition of vcry smrll 8Dounts of snti{xida-nts or cmulsifi crs.

¶128

Thc hcading also ercludc.s :

¶129

(a) Sago pitl (herdlng 07.14).

¶130

(b) Prcpared foodsturls krown as trpiocs (hcrdlng 19.03).

¶131

Wc find that thc l)ouls may rernain classified in Chapter Heading¹ 1.01 or¹ 1.02, if tl.rc flour has bccn irnproved by thc addition of vcry small quantities of'spccificd substanccs. Ilowcvcr, ifothcr substanccs^(othcr than spccified substances) arc added to the flours with a view to use as 'lbod preparations', then the same^gets cxcluded liom the Chaptcl I leading I l.0l or I 1.02. F'urther, various products being supplied by thc appellant contain spices and other ingredients apaft from flour of^dricd lcguminous vcgetablcs, rice and wheat, in different^proportions. The spices^andother ingrcdients containcd in these products include sugar, iodised salt,^{red chili powder,} garam masala raising agent UNS 500(ii)], black pepper, coriander, ajwain, fennel, acidily regulator.^'l-hese spices and ingredients are other^{than thosesubstances} rncntioncd in thc cxplanatory rlotcs 01' I ISN lor Chaptcr^{I leading I l} .0l^{and 1 1 .02} w'hicl-r coulcl bc adclccl in vcr-"- small^quantities to it.uprovc^{or cnrichthc llours} rcsultant producl to still remain classilled in those Chapter^{Headings.'l'hc p}

¶132

¶133

ll-, r Page 8 of 12 l\

¶134

¶135

ol spices and other ingredients contained in these products ranges from 5yo ro^27Yo, which is already mentioned in the table supra in paragraph 6. It is aiso cvident lron.r thc recipe submitted by the appellant that the spiccs and other ingredients havc bccn addcd to the flours lor their use as fiood preparations.^'l.hus, in vicw of thc explanatory notes ofthe HSN, these products are excluded from the Chaptcr Ilcading 11.01 and 11.02 as well as from the Chapterl-Ieadinqs 11.03 and 11.04.

¶136

2l . The appellant has further stated that their product would fall undcr^I ISN code 1106.^'l-he expianatory note to chapter 1106 is reproduced supra.^{I lowcvcr,il"} would be prudent to reproduce the chapter heading I 106 of Customs^'l'ariff for casc of understanding vlz

¶137

Chapter Heading 7 706 as per Customs Tariff:

¶138

] 106 FLOUR, Al EAL AND I,OWDER OF THE DRIED LEGTIAT|NOLIS^/EGE'1'ABLES OF HEADING 0713, OF SAGO OR OF ROOTS ORTUBERS^{OF'HEADING0714OR} OF THE PRODUC?S OF CHAPTER B:

¶139

1 106 1O OO- Of the clried lectunfircus ueqetebles of lteaclinq^071.7

¶140

1106 20- Of sago or of roots or tubers of heaclitgl 0714

¶141

1 106 20 1O-- OJ sctgo

¶142

1 106 20 2O -- Of rnattioc /ccssar.,a,/

¶143

1 106 20 9O-- Of other roots and tubers

¶144

1 106 30 - Of the products of Clnpter 8:

¶145

1 106 30 1O-- Of tamarbrl

¶146

1 106 30 2O--- Of singloda 1 106 30 3O--- Mart.clo Jlour 1106 30 9O*- Other

¶147

Now, as is evident, Chapter Heading 11.06 covers " ltlour, Meal and Powder of the dried leguminous vegetables oJ Heading 0713, of sago or of roots or ltrbers o.f Ileading 07 I 4 or of the products of Chapter 8". As per Rule 1 of the Gcncral ILulcs 1br the Interpretation olCustoms^'lariff Acl, 1975, for legal purposes, classification shall be determined according to the terms of the headings and any relalivc section o1'Chapter Notes. Thus, the classification of the product is required to be dctermincd in accordance with the terms of the headings. As pcr Chapter I{eading 1 1.06, it covcrs Flour, Meal and Powdcr of the dricd leguminous vcgetables ol' Chaptcr I-leading 07. l3 and other specified products. As the products olthe appcllant contain spices and other ingredients in different proportions, which arc not mentioncd in thc Chapter I'leading 11.06 or the rclcvant explanatory notes of IISN, wc flnd that said^products are not co nder Chapter Heading I1.06.

? \9

Page 9 of 12

2l.l 'l'hough the appellant before us has contended that his goods merir classification undcr 1102 or 1106, we find that before the GAAR, he had stated that his claim of thc goods lalling undcr 1 102 was a typographical mistake. We reproducc thc rclevanl para I I ol'thc irnpugned ordcr datcd 30.7 .202l,lor case of refercncc vi;2.

¶152

ll. 'lhc applicant lirrthcr submittcd that in application fbr thc Adr';rncc Ruling tiled \ith thc authoritr'. thc claritlcation has bccn sought for item fhlling uncler HSN Codc Il0l. is in lirct tvpographical mistakc that thc HSN codc has bccn mentioncd in thc applicirtiorr rras ll0l instcad ol applicablc IISN Code 110(r. Accordingly. it is pra1.'cd that thc moditlcrtion in thc original applicotion br considcrcd ibr HSN codc Il06 and accorilingll. rll)crcvcr llSN codc I 102 is rrrcntioned. it should bc trcalcd as HSN Codc It06.

¶153

'l'hc appcllant's next submission is that the impugned order wrongly dill'ers their flours fiom 'Sattu'. fhe appellant has reiied upon CBIC's circular No. ti0/54/2018-GS'l'datcd3l.l2.20 l8tosubstantialchisavermcnt. Itistheappellant's claim thal both thcir product and sattu havc the below mentioncd similarities vL

¶154

(i) lloth arc containing major por.tion of flour

¶155

(ii) Iloth arc known as flour in parlance

¶156

(iii) Iloth havc minor quantities of spices

¶157

(iv) tloth have to be cooked lor consumption le 'not ready to eat'

¶158

(v) lloth arc indigenous local products

¶159

(vi) Iloth arc supplied in unit containcrs bearing brand name.

¶160

Ib examinc the claim of the appellant, the relevant portion of the circular

¶161

rclicd upon is bcing reproduced for ease of refcrence viz

¶162

CIIIC circul ar No. 80/54120 1 8-GS1' dated 3 L 1 2.20 1 8helevant extractsl

¶163

Applicability of GST on Chhatua or Sattu: 3.1 Douhts havt' bet'n raised regarding applicability of CST on Chhatua (Knon n as "Sattu" in Hintli Belt).

¶164

3.2 Chl.ratua or Sattu is a nrixture of flour oi ground pulses and cereals. HSN code 1106 includes the flour, meal and powder made from peas, beans or lentils (t'lried lc'gumirrous vegetables falling under 0713). Such flour improvr.d bv the addition of vc.ry small amounts of additives continues to be classified under HSN code 1106. If unbranded, it attracts Nil GST (S. No. 78 of notification No.21201,7Central Tar (ltate) dated 28.06.2017) and if branded and packed it attracts 5"/. GST (S. No. 59 o[ schedulc I of notification No. l/2017-Central Taxes (Rate) dated 28.06.2017).

¶165

Ihc CIIIC has clarilicd in the aforesaid circular that the flour ofground pulscs and cclcais, irnprovcd lry the addition of vcry small amounts oladditives continues to bc classificd undcr I ISN Code I 106. I{owever, thc said clarification is no1 a

a.> r.q

PaBe 10 of 12

thc present case as the products being supplied by the appcllant contain spices and other ingredients, which is not the case with the 'Chhatua or Sattu'.

¶170

In view of the foregoing, we hold that none of the products ol the appellant merit classification under Chapter 11 of thc Customs Tarilf Act, 1975 and specifically under Chapter Headings 11.01, 11.02, 11.03, 11.04 or 11.06 of thc Customs Tariff Act, 1975

¶171

-l'he appellant wc find has also questioned the classillcation ol'the products in qucstion by GAAI{ under IISN 2106 90, which covcrs"l;ood l)reparalions nol elsewhere specified or included' . We find it prudent to reproduce the I ISN cxplanatory notes [relevant extracts] for the ease of understanding viz

¶172

21.06 - Food preprations not elsewhere speclfled or included.

¶173

2106.10 - Protcill concertratcs aad tcxtured proteil substarres

¶174

2106.90 - O:hcr

¶175

Provldld ahrt thcy .ra not @vercd by .uy other bqdlng of the NoEencleture, this hcrding covcni: I

¶176

(A) Prcparatioru for usc, cither dircctly or afrcr proccssing (such as cooking, dissolving or boiling iD watcr, milk, ctc.), for hunun conswiption.

¶177

(B) - PreDaratiors consistinc whollv or Dartlv of foodstuffs. used in the makinc of bcvcrascs or fooil oreoarations for Euman ionsrimotion. Tbc hcsdini includes oreoaratiors consistinc of nixnirts'of chemi"als (organlc acids, o.lcium srlts, crc:) udth foodstirlfs (flour, suqar, riilk powocr, ac.), lor mcorporatlon m lood pr"9argtroE erther as lngedlcnts or to lrDprovc somc of thcir charaairistics (appc!r8de, kccpinR qualitics, itc.) (sec thc Gincral Exphutory Notc to ChEpter 38).

¶178

Hocrcvcr, thc hcrdi!8 doca lot c!v.r.arynuric prcpsmrioos contsioing foodrruflr (c.g.. nret tcndcriscrs consistrlg of r protcolytic ctzync with added dcxtrosc or btbcr foodstuffs). Suh prEQstltoa! fiu in hcrdint 35,07 provldrd tbat tbcy arc not covcrcd by a rnorc spccific hcading rn thc No[EnchtuE.

¶179

As is evident from the explanatory notes, it covers lood preparalions not elscwhcrc specified or inciuded. Further of 2l .06 covers thc prcparation lor usc, cither dircctly or after processing (such as cooking, dissolving or boiling in watcr, milk, etc.) |or human consumption, and preparations consisting wholly or partly of |oodstu lls, uscd in the making of beverages or food preparations for human consumption, arc classifiable under Chapter Heading 2i.06 of the C'l'A, 1975.

¶180

The appellant has already stated that his 7 products of Mix l'lour / Instanl Mix flour are prcparations consisting wholly of lbodstulls viz. flours of legun.rinous vegetables and cereals as well as spices and condiments, and thcse products arc uscd in the making ol'food preparations ((i) Gota flour (ii) Khaman flour ( llr I I)al tlour (iv) Dahiwada fiour (v) Dhokla flour (vi) Idti f'lour (vii) I)osa flou r) consunrption. Irurther, these products arc prcparations lor use, cithcr dir o

Page 11 of 12

proccssing, such as cooking, dissolving or boiling in waleq milk, etc., fbr hurnan consumption.^'l'hus, wc arc of the view that all the aforementioned 7 products of Mix l'lour / Instant Mix flour arc appropriately classifiable under 21.06 olthc HSN. As thcsc products arc not specifically mentioned under any specific^'larilf Item ol Chaptcr Ilcading 2106 olthe C'l-A, 1975, these products are classihablc undcr the rcsiduary cntly i.e.^'Iariff Item 2106 90 99 as "Othcr".

¶185

21 . 'l hc appcllant has lurther also submitted that the Mix l'lour / Instant ]\4ir l:lor.rr is not a rcady-tr>-cat lbod. In this rcgard, wc observe that Chaptcr I Icading 2l .06 and specifically^'fari ff Itern 2106 90 99 is not confined to processed or scmi proccsscd lbod, cookcd or scmi cooked food, preserved food and ready to cat food. ln lact. any producl which is a food preparation and which is not elsewherc spccilied or includcd in the C'IA, 1975, gets covered under Chapter I leading 2106 o lthe C'tA, 1975.^'l'hcrcfbre, mcrcly because the end consumer of the Instanl Mix Irlour is rcclr.rircd to lollow certain lood preparation processes before such product(s) can be corrsumcd, is r.ro glound 1o take these products out of Chapter Heading 2106 of thc c'ln. t975.

¶186

'l hc appcllant we llnd has stated that his submissions werc not lirlly considcred in truc spirit. Howevcr, the submission not considered in the impugncd ordcr, is not spccilically mentioned by the appellant. IJence, this averment is not lcnablc.

¶187

Wc agrec with the findings and the ruling of the GAAR vide the impugncd ordcr dalcd 30.7.2021 in so far as classification of the seven products and thc ratc ol (lS'l is conccrncd.'l'hc Appcllant, wc find has not produced anything cornpelling us to intcrlcrc with thc findings of the GAAR.

¶188

lr.r vicw oI'the above findings, wc rejcct the appeal filed by appcllant M/s. Kitchcn tixprcss Overseas Ltd against Advance Ruling No. Guj/GAAR/R/3212021 daicd 30.7.2021, passcd by thc Gujarat Authority lbr Advance^ltuling.

¶189

fi
,d,:';^:,, Au-r H0Ri (Ii V Siva Naga Kumari)
Mcnr bcr (S(;Sl') Member (CGS'l')
Ahrnedabad
[)atc:29.6,2q /.
ul
12 of 72

¶190

I'lacc: Ahrnedabad [)atc:29.6,2q

M/s. Kitchen express overseas Ltd.

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