Authority for Advance Ruling
Case Title | Sri Manjunatha Fruit Canning Industries vs |
Court | Andhra Pradesh AAAR |
Honorable Judges | Member Suresh Kishhani & Member S.Ravi Shankar Narayan |
Citation | 2022 (1) GSTPanacea 365 HC Andhra Pradesh AAAR/AP/02(GST)/2022 |
Judgement Date | 20-January-2022 |
Council for Petitioner | KVJLN Sastry |
Council for Respondent | NA |
Section | Section 101 of CGST Act |
In Favour of | In Favour of Assesses |
The Andhra Pradesh bench of Member Suresh Kishhani & Member S.Ravi Shankar Narayan has held that there is a specific entry for `Mango Pulp` in chapter 8. The entry No.51 of 0804 of the above notification reads as, 0804 “Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh.” The above entry exempts only fresh mangoes from being exigible to tax As there is no specific entry under GST tariff notifications meant for this product `mango pulp/puree`, the entry no. 453 of Schedule-III of Notification No.1/2017-Central Tax (Rate) dt: 28.06.2017 is applicable, which is a residuary entry, attracting the tax rate of 18%.
FACTS OF THE CASE
The applicant submitted the manufacturing process of the Mango pulp/puree as under
The applicant states that selected varieties of fresh mango fruits are procured and transported to the fruit processing plant. The fruits are inspected, graded and washed and sent to the controlled ripening chambers. The fully ripened mango fruits are then washed, blanched, pulped, deseeded, centrifuged, homogenized, and thermally processed. The preparation process includes cutting, de-stoning, refining and packing. The refined pulp is packed in cans, hermetically sealed and retorted. The applicant claims, this process ensures the retention of the natural flavor and aroma of the fruit in the final product.
The applicant submits that the product in question is called `pulp` in some countries and `puree` in some other countries.
In connection with the above product, the Appellant sought clarification with regard to classification of the product and the rate payable thereon,
The Appellant had filed an application for Advance Ruling before the Authority for Advance Ruling on the following questions:
Can the Mango Pulp be treated as fresh fruit and exemption be claimed? If not whether the mango pulp falls under the heading 20079910 or 0804?
What is the rate of tax payable on outward supplies of Mango fruit pulp under the GST Act?
The Authority for Advance Ruling Andhra Pradesh in its orders in AAR No.17/AP/GST/ 2021 dated 14.07.2021 held: Mango Pulp/Puree shall neither be treated as a fresh fruit nor be classified under headings 20079910 or 0804, `Mango pulp/puree`, under the entry no. 453 of Schedule-III of Notification No.1/2017-Central Tax (Rate) dt: 28.06.2017 attracts the tax rate of 18%.
Aggrieved by the impugned order, the appellant has filed the present appeal on the following ground
The appellant submits that the Advance Ruling Authority has not discussed either the filing of additional grounds or the applicability of contentions raised in his additional grounds while passing the order. The advance ruling authority has failed to discuss the applicability of entries 2007, 0804 or 2008, 2007 9910 or 2202 9920
“It is evident from the above that Headings 2007 and 2008 do not apply to the goods under discussion i.e., `Mango Pulp/Puree`, which are nothing but fruit pastes. Hence the claim of the appellant is non-applicable in the present context.”
The appellant submits that the Advance Ruling Authority has accepted that the Mango Pulp/puree are nothing but fruit pastes. But, failed to discuss as to why the HSN Code 2007 does not apply. The Advance Ruling Authority has not considered the classification of the product under 2007 99 10, which was accepted by Customs Authority, while exporting the goods.
Authority for Advance Ruling
COURT HELD
Considering the facts as recorded, held that coming to the product `Mango Pulp/Puree`, it finds place under chapter heading no. 08045040 of the Customs Tariff Act, 1975.
When there is a specific entry for `Mango Pulp` in chapter 8, it is to be preferred over other general entries in the subsequent chapters
There is a specific entry for `Mango pulp` under chapter 8, and it is also mentioned categorically in Notes to chapter 20 that, `the fruits or nuts prepared or preserved by the processes specified already in Chapter 8 shall not be covered under chapter 20`. The excerpt of the chapter notes is presented below
There are different entries related to `Mangoes and Mango Products` at various schedules, with different tax rates in the tariff notification, as presented under.
(I) The entry No.51 of 0804 of the above notification reads as, 0804 “Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh.” The above entry exempts only fresh mangoes from being exigible to tax.
As there is no specific entry under GST tariff notifications meant for this product `mango pulp/puree`, the entry no. 453 of Schedule-III of Notification No.1/2017-Central Tax (Rate) dt: 28.06.2017 is applicable, which is a residuary entry covering goods which are not specified in Schedules I, II, IV, V, VI of the Notification, attracting the tax rate of 18%.
Bench hereby modify the Order passed by the Authority for Advance Ruling vide AAR No. 17/AP/GST/2021 Dated 14.07.2021 and hold that the `Mango Pulp / Puree` is classifiable under Tariff Item 0804 50 40 and chargeable to GST @ 18%, by virtue of entry No.453 of Schedule III in Notification No. 1/2017 – Central Tax (Rate) Dated 28.06.2017
Authority for Advance Ruling
ANALYSIS OF THE JUDGEMENT
The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.” Therefore, while the Rate Notification under GST provides the rate of tax on goods and services, in order to interpret these Rate Notifications for purposes of levy of GST, one has to read the same along with the First Schedule (including the Section and Chapter Notes and General Explanatory Notes) of the Customs Tariff Act, 1975 (“Tariff”)
Each Section and Chapter under the Tariff is accompanied by the notes known as “Section Notes” and Chapter Notes. Classification is to be determined only on the basis of description of the heading read with relevant section or Chapter notes.
As there is no specific entry under GST tariff notifications meant for this product `mango pulp/puree`, the entry no. 453 of Schedule-III of Notification No.1/2017-Central Tax (Rate) dt: 28.06.2017 is applicable, which is a residuary entry covering goods which are not specified in Schedules I, II, IV, V, VI of the Notification, attracting the tax rate of 18%
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Sri Manjunatha Fruit Canning Industries
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