What is the classification of “Flavored Milk” under the CGST Act?

This ruling addresses the classification of flavoured milk under the CGST Act, specifically for Vadilal Industries Ltd. The company argued that their flavoured milk, produced through processes like pasteurisation and flavour addition, should be classified under Heading 0402, Sub-Heading 04029990 of the GST Tariff. They contended that adding flavours does not alter the essential character of milk, making it a substitute or simple preparation of milk.

GUJARAT AUTHORITY FOR ADVANCE RULING
GOODS AND SERVICES TAX
D/5, RAJYA KAR BHAVAN, ASHRAM ROAD,

AHMEDABAD – 380 009.
ADVANCE RULING NO. GUJ/GAAR/R/05/2021
(IN APPLICATION NO. Advance Ruling/SGST&CGST/2020/AR/46)
 Date: 20.01.2021

Name and address of the
applicant
: M/s. Vadilal Industries Ltd.,
Vadilal House, 53, Shrimali Society, Nr.
Navrangpura Police Station, Navrangpura,
Ahmedabad-380009

GSTIN/ User Id of the
applicant
: 24AAACV4887F1Z6

Date of application : 03.11.2020

Clause(s) of Section 97(2) of
CGST / GGST Act, 2017,
under which the question(s)
raised.
: (a) classification of any goods or services
or both.

Date of Personal Hearing : 23.12.2020

Present for the applicant : Shri Amal Dave

M/s. Vadilal Industries Ltd. is a Limited Company and having a GSTIN: 24AAACV4887F1Z6, has filed an application for Advance Ruling under Section97 of CGST Act, 2017 and Section 97 of the GGST Act, 2017 in FORM GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act and the GGST Act.

2. M/s. Vadilal Industries Ltd. (hereinafter referred to as “the applicant”) is a Company inter-alia engaged in the manufacture of goods like Ice Cream, readyto eat food and various other Milk products. Among other products, the applicant is producing flavoured milk, which is sold under the trade name of “Power Sip”. It is the applicant’s understanding, and also the applicant’s case in the present application that such flavoured milk is a product meriting classification under Heading 0402, Sub Heading 04029990 of the GST Tariff.

3. The applicant submitted the following with regard to the case about flavoured milk:-

The process of the flavoured milk is standardization of fresh milk according to the fat contents and then heating at certain temperature followed byfiltration, pasteurization, and homogenization and then mixing of sugarand various flavours and finally bottling. The flow chart of the manufacturing process is enclosed and marked as Annexure-“A”.

As aforesaid, the process involves various operations, but it comes out fromthe process that (i) adding flavours to milk does not change essential character of milk; (ii) flavoured milk is a substitute for milk; (iii) it is a simple preparation of milk; (iv)no manufacturing process is involved nordoes milk change its composition in any way. Since the commodity milk and milk products are enumerated in Chapter 4, the applicant understands that tariff item/ HSN code 0402 9990 is applicable to flavoured milk.

To know more in details find the attachment file