Case Title | Vadilal Industries Limited |
Court | Gujarat AAAR |
Honorable Judges | Member Vivek Ranjan and Member Milind Torawane |
Citation | 2022 (8) GSTPanacea 390 HC Gujarat GUJ/GAAAR/APPEAL/2022/18 |
Judgement Date | 26-August-2022 |
Council for Petitioner | Mr Amal Dave |
Council for Respondent | Not applicable |
In favour of | Revenue |
Section | Classification of Goods |
The Appellate Authority for Advance Ruling, Gujarat bench of Member Milind Torawane and Vivek Ranjan, held that the flavoured milk, named ‘Power Sip’ is classifiable under beverages and not flavoured Milk and upheld the ruling of AAR.
FACTS OF THE CASE
The appellant engaged in the manufacture of goods like Ice Cream, ready-to-eat food and various milk products. Among other products, they are producing flavoured milk under the trade name of “Power Sip”. The appellant contended that the product was classified under milk as it was made by standardisation of fresh milk according to the fat contents and heating at a certain temperature followed by filtration, pasteurisation, homogenisation, and then mixing of sugar as well as various flavours. It was argued by the appellant’s advocate, Shri Amal Dave that adding flavours to milk doesn’t change the essential character of milk.
COURT HELD
The Gujarat Authority for Advance Ruling observed that chapter HSN 0402 does not cover beverages of milk flavoured with cocoa or other substances and ruled that “’Flavoured Milk’ is classifiable under Tariff Item 2202 99 30 of the first schedule of the Customs Tariff Act, 1975 as a ‘beverage containing milk’ “ It was argued that the Classification of products under GST requires looking into aspects like common parlance, end-use, technical specifications, constituents of the products etc.
A Coram consisting of Vivek Ranjan, member (CGST) and Milind Torawane, member (SGST) observed that the heading 0402 contains full cream milk and partially or fully skimmed milk while Power Sip uses double-toned milk which is not full cream milk or skimmed milk.
The Authority affirmed the AAR ruling on classification and said that flavoured milk is not milk but a beverage containing milk as it was not the natural form of milk but was obtained after the application of specific processes on the milk.
ANALYSIS OF THE JUDGEMENT
As per the above case we analyse that Flavoured Milk classifiable as a beverage, attracts 12% GST.
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Vadilal Industries Limited
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Gujarat AAAR