2018 (12) TMI 892 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – TMI – Classification of goods – Rates of GST – Unleavened Flatbreads – Leavened Flatbreads – Corn Chips, Corn Taco and Corn Taco Strips – Pancakes – Pizza Base – Applicability of entry No.99A of Schedule to the Notification No. 1/2017 – IGST Act dated 28/06/2017.
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Whether Unleavened Flatbreads treated as ‘Khakra, plain chapatti or roti under Entry No. 99A of Schedule or as ‘bread’ as mentioned under Entry No. 97 or as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis or under any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit? – Held that:- The food product paratha as is available in hotels and restaurants is plain, folded or stuffed. By applying the common parlance test we understand paratha as different and distinct food commod
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bread has been defined as a usually baked and leavened food made of a mixture whose basic constituent is flour or meal – Pita is a yeast leavened round flatbread baked from wheat flour, sometimes with a pocket. From the ingredients and the manufacturing chart, we find that applicant uses similar/ same ingredients and same manufacturing process as that of bread – As there is no difference in the conventional bread and pita bread with respect to ingredients and manufacturing process, it is held that Pitta bread would squarely fall under entry 97 of the exemption notification.
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Whether Corn Chips, Corn Taco and Corn Taco Strips be treated as ‘wafer’ under Entry No. 16 of Schedule III of Rate Notifications or as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis or under any other Schedule Entry as per Rate Notification or Exemption Notification as your
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III of Rate Notifications or classified any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit? – Held that:- The pancakes are manufactured by using ingredients like wheat flour, water, sugar, salt, milk, syrup, oil etc. Similarly we find that cake is an item soft sweet food made from a mixture of flour, fat, eggs, sugar, and other ingredients, baked and sometimes iced and decorated – Cake is mentioned under the chapter heading 1905 of customs and tariff Act 1975. The product cake is mentioned in the entry 16 under the head of “All Goods “i.e. waffles and wafers other than coated with chocolate or containing chocolate, biscuits; Pastries and cakes (other than pizza bread, khakhra, plain chapatti or roti, Waffles and wafers coated with chocolate or containing chocolate, papad, bread] – the impugned the product “Pancakes” is covered under the chapter heading 19059010 under the entry 16 of schedule Ill of GST ACT and liable to tax at app
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try 99 of schedule I of GST Act and would be liable to tax rate at appropriate rate.
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Ruling:- The Unleavened Flatbreads products such as plain chapatti, Tortilla, Tortilla Wraps, roti, Roti rolls , Wraps, Paratha and Paratha wraps are covered under Entry No. 99 A of Schedule 1 and they would be liable to tax @ 5% (2.5 % each for CGST and MGST and 5 % for IGST).
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The product Leavened Flatbreads stated in application such as Naan, Kulcha and Chalupa are not covered by the expression ‘bread’ as mentioned under Entry No. 97 of Exemption Notifications but they would be covered under residual entry 453 of schedule Ill of GST ACT and they would be liable for taxes @ 18 %( 9% CGST and 9% MGST ). However Pita Bread is covered by the expression ‘bread’ as mentioned under Entry No. 97 of Exemption Notifications.
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The products like Corn Chips, Corn Taco and Corn , Taco Strips would be treated as ‘wafer’ under Entry No. 16 of Schedule III of Rate Notifications and it would be liable
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ce ruling in respect of the following questions. 1. Whether on facts and circumstances of the case, the Unleavened Flatbreads be treated as Khakra, plain chapatti or roti under Entry No. 99A of Schedule / of Notification No. 01/2017-lntegrated Tax (Rate) dated 28 June 2017, Notification Number 1/2017-CentraI Tax (Rate), dated 28 June 2017 and Notification Number 1/2017-State Tax (Rate) No. MGST 1017/C.R. 104/Taxation-1, dated 29 June 2017 (collectively referred to as the Rate Notifications ) if not, whether on facts and circumstances of the case, the Unleavened Flatbreads be classified: (i) as bread as mentioned under Entry No. 97 of Notification Number 02 Number 2/2017- Integrated Tax (Rate), dated 28 June 2017, Notification Number 2/2017-Central Tax (Rate), dated 28 June 2017 and Notification Number 2/2017-State Tax (Rate) No. MGST1017/ C.R. 103(1)/Taxation-1, dated 29 June 2017 (collectively referred to as the Exemption Notifications); or (ii) as Malt extract, food preparations of f
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ntioned under Entry No. 99 of Schedule of Rate Notifications; or (ii) as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis, not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 190510n a totally defatted basis not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905) under Entry No. 13 of Schedule III of Rate Notification or (iii) Any Other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit 3. Whether on facts and circumstances of the case, Corn Chips, Corn Taco and Corn Taco Strips supplied be treated as wafer under Entry No. 16 of Schedule III of Rate
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lied be treated as All Goods i.e. Waffles and wafers other than coated with chocolate or containing chocolate; biscuits; Pastries and cakes (other than pizza bread, khakhra, plain chapatti or roti, Waffles and wafers coated with chocolate or containing chocolate, papad, bread) as mentioned under Entry No. 16 of Schedule III of Rate Notifications, If not whether on facts and circumstances of the case, the Pancakes be classified any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit 5. Whether on facts and circumstances of the case, Pizza Base supplied be treated as Pizza Bread as mentioned under Entry No. 99 of Schedule / of Rate Notifications. If not, whether on facts and circumstances of the case, the Pizza Base be classified any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act
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harashtra. 1.2. The company is engaged in the business of, inter alia, manufacturing, trading and exporting bakery products which includes flatbreads. 1.3. The products are available in an ambient and frozen format with a shelf life ranging from a few days to one year depending on the customers requirements. The Applicant supplies products to customers and distributors in India and in overseas markets including the Middle East, South East Asia, Africa and Australia. 1.4. Presently, the Applicant supplies flatbreads to retailers, canteens, airlines, hotels, hospitals, schools, restaurants, wholesalers, distributors and other foodservice operators located in India and overseas. Unleavened Flatbread information 1.5. The Applicant has been engaged in manufacturing and supplying unleavened flatbreads including Plain Chapatti and variants of Chapatti flatbreads referred to internationally in different countries as Tortilla, Tortilla Wraps, Wraps, Roti Rolls, Roti, Chapatti, Paratha and Parat
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hibit 1. Leavened Flatbread information ( Bread Products ) 1.8. The Applicant has been engaged in manufacturing and supplying leavened flatbreads including Naan, Kulcha and variants of these type of leavened breads referred to internationally in different countries as Pitta bread, Chalupa, Corn bread, Leavened Flatbreads and Unfolded Leavened FIatbread. 1.9. While manufacturing these leavened flatbreads, the Applicant uses various raw materials such as maida, tandoori atta, atta, water, rice flour, oil, yeast, salt, sugar etc. The bakery process can be defined as a succession of steps that ensure the proper transformation of basic ingredients into leavened flatbread. The baking processes the Applicant uses follow the same basic steps as, traditional baking processes used for thousands of years. 1.10. The traditional process of baking bread involves preparation of dough from various ingredients such as maida, tandoori atta, atta, water, rice flour, oil, yeast, salt, sugar etc. The dough
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ic acid, guar gum etc. upon raw material intake, the ingredients go through various processes including mixing, dough dividing, baking and cooling. After the cooling process, the products are packed, the packets are labelled and subsequently stored and transported at -18 Degree Celsius temperature. 1.14. Upon receipt of these products, the customer or end consumer fries the product, which is similar to products such as wafers. We have attached herewith the manufacturing process flow as Exhibit 1. Pancake s information 1.15. In addition to above, the Applicant also manufactures pancakes , a flat cake, often thin and round, prepared from a starch-based batter that may contain milk baked on a hot surface such as a griddle or frying pan. 1.16. The products are manufactured by the Applicant using various ingredients including wheat flour, water, sugar, salt, milk, syrup, oil etc. Upon raw material intake, the ingredients go through various processes including mixing, dough dividing, baking
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has approached the Hon ble authority to determine the classification of Unleavened Flatbreads such as Plain Chapatti, Tortilla, Tortilla Wraps, Wraps, Roti Rolls, Roti, Chapatti, Paratha and Paratha Wraps Leavened Flatbreads such as Naan, Chalupa, Pita Bread, Kulcha, Leavened Flatbread, Unfolded Leavened Flatbread Wafer products such as Corn Chips, Corn Taco and Corn Taco Strips Pancakes Pizza bread in terms of Rate and Exemption notifications. 2.2 The Applicant strongly believes that the products being supplied should be classified under the below mentioned schedule entry: Sr.No. Product Supplied Schedule Entry No Description Unleavened Flatbreads Entry No. 99A of Schedule I Khakhra, Plain Chapatti or Roti Leavened Flatbreads Entry No. 97 of Exemption Notification Bread Corn Chips, Corn Taco, Corn Taco Strips, Entry No. 16 of Schedule III All goods i.e. Waffles and wafers other than coated with chocolate or containing chocolate; biscuits; Pastries and cakes (other than pizza bread, k
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llowing, among other grounds, each of which is taken in separately and without prejudice to the others. 1. Applicants interpretation of law or facts with regards to Question No. 1 Whether on facts and circumstances of the case, the Unleavened Flatbreads be treated as Khakra, plain chapatti or roti under Entry No. 99 A of Schedule I of Notification 01/2017-lntegrated Tax (Rate) dated 28 June 2017, Notification Number 1/2017-CentraI Tax (Rate), dated 28 June 2017 and Notification Number 1/2017-state Tax (Rate) No. MGST1017/ C.R. 104/Taxation-1, dated 29 June 2017 (collectively referred to as the Rate Notifications ) If not, whether on facts and circumstances of the case, the Flatbreads be classified: (i) as bread as mentioned under Entry No. 97 of Notification Number 02 Number 2/2017 Integrated Tax (Rate), dated 28 June 2017, Notification Number 2/2017-Central Tax (Rate), dated 28 June 2017 and Notification Number 2/2017-State Tax (Rate) No. MGST10171 C.R. 103(1)/Taxation-1, dated 29 Jun
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ated 28 June 2017 providing taxability on intra-state supplies of goods, the description of which is specified in the corresponding entry in Column (3) of the said schedules, falling under the tariff item, sub-headings, headings or chapter, as the case may be, as specified in column no (2) of the said schedules. Similar notifications have been issued under Integrated Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017. 1.2. In exercise of the power conferred by Section 9(1) of the Act, the Central Government on the recommendations of the councils made further amendments to the above mentioned notification in the form of introducing Entry No. 99A as Kharkhra, plain chapatti or roti vide Notification No. 34/2017 dated 13 October 2017. The said notification does not define the term Khakhra, Plain Chapatti or roti . However, it has mentioned that the tariff item, sub-heading, heading and chapter shall mean respectively a tariff item, sub-heading, heading and cha
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alt and water (iii) Roti: a flatbread made from stone ground whole meal flour, traditionally known as atta 1.5. In this regard, we wish to submit that the Applicant follows similar processes while manufacturing unleavened flatbreads. The products are manufactured by the Applicant using various ingredients including atta, maida, water, palmolein oil, salt, sugar, baking powder, wheat gluten etc. Upon raw material intake, the ingredients go through various processes including mixing, proofing, dough dividing, baking and cooling, After the cooling process, the unleavened flatbread is packed and labelled and subsequently stored and transported at -18 Degree Celsius temperature or transported ambient. 1.6. Further, we wish to reiterate the fact that the Applicant uses atta, maida, water, palmolein Oil, salt, sugar, baking powder, wheat gluten etc. while manufacturing the range of unleavened flatbreads. We have attached herewith Exhibit 3 providing the list of ingredients used for each of th
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f there is no meaning attributed to the expressions used in the particular enacted statute then the items in the customs entries should be judged and analysed on the basis of how these expressions are used in the trade or industry or in the market or, in other words, how these are dealt with by the people who deal in them, provided that there is a market for these types of goods. This principle is well-known as classification on the basis of trade parlance. This is an accepted form of construction- It is a well-known principle that if the definition of a particular expression is not given, it must be understood in its popular or common sense, viz., in the sense how that expression is used everyday by those who use or deal with those goods. The copy of the judgement is attached as Exhibit 4. 1.9. The Apex Court has laid down as to when the common parlance test can be used. It has provided that the following conditions need to be satisfied to call for common parlance test. These are; No
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ce tests are the generally accepted tests, various other tests have been evolved from time to time to interpret items of taxing statutes. One of such tests is commonsense test or commonsense rule of interpretation On the basis of the above judgments, it can be concluded that either the common parlance or the user test should be applied in interpreting a word not defined by the statute. 1.11. In the present instance, the conditions laid down for applying the common parlance test as described above (i.e. not defined in the statute and having an open market) are satisfied. Hence, it is humbly submitted that the word Plain Chapatti or Roti should be understood in the sense in which it is understood by the common man and by any common trader in the food industry, 1.12. In this regard, the Applicant wishes to submit that they are engaged in manufacturing and supplying unleavened flatbreads including Plain Chapatti and variants of Chapatti flatbreads referred to internationally in different c
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etation evolved by Courts is that of the end-user. As discussed above, the Hon ble Bombay High Court has reiterated the validity of this test in the case of Pharm Aromatic Chemicals (supra), The relevant observations of the High Court are reproduced below: Another test, which is sometimes applied by the Courts is user test . According to this test the use to which the goods can be put can also be considered in interpreting an item. However, this rule of interpretation has got its own limitations because certain goods may be put to certain uses by different persons. That, however, should not entitle the revenue to apply different rates of tax to the sales of same goods by different persons depending upon the use to which they will be put by the purchasers. Basis the above observations, it is humbly submitted that the word Plain Chapatti or Roti should be interpreted in light of the end-use made by consumers. 1.16. It is, humbly submitted that people use plain chapatti, roti or variants
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ved for consumption and pizza bread; or (ii) Entry No. 13 of Schedule III of Rate Notification, which stands for Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis, not elsewhere specified or included (Other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905]on a totally defatted basis not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905); or (iii) Any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit. 2. Applicants interpretation of facts or law with regards to Question No. 2 Whether on facts and circumstances of the case, the Leavened Flatbreads be treated as as bread as menti
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fit Applicant s facts and interpretation of law 2.1. The Department of Revenue, Ministry of Finance, has issued a notification number 02/2017-CentraI Tax (Rate) dated 28 June 2017 providing exemptions on intra-state supplies of the description of which is specified in the schedule appended to the said notification from the whole of the central tax leviable thereon under the section 9 of Central Goods and Service Tax Act, 2017 (12 of 2017). Similar notifications have been issued under Integrated Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017. 2.2. The Schedule Entry No. 97 of the above mentioned notification provides the exemption on supply of Bread (branded or otherwise), except when served for consumption and pizza bread classifiable under Chapter Harmonized System of Nomenclature (HSN) 1905. The said notification does not define the term bread and pizza bread . However, it has mentioned that the tariff item, subheading, heading and chapter shall mean
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itions, the leavened flatbreads would be classified as bread. 2.5. In this regard, we wish to submit that the Applicant follows similar process while manufacturing leavened flatbreads. The products are manufactured by the Applicant using various ingredients including maida, tandoori atta, atta, water, rice flour, oil, yeast, salt, sugar etc. Upon raw material intake, the ingredients go through various processes including mixing, proofing, dough dividing, baking and cooling. After the cooling process, the leavened flatbread is packed and labelled and subsequently stored and transported at – 18 Degree Celsius temperature or transported ambient. 2.6. Further, we wish to reiterate the fact that the Applicant uses maida, tandoori atta, atta, water, rice flour, oil, yeast, salt, sugar etc. while manufacturing the range of leavened flatbreads. We have attached herewith Exhibit 3 providing the list of ingredients used during manufacturing process for each of the leavened flatbreads. 2.7. In th
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of how these expressions are used in the trade or industry or in the market or, in other words, how these are dealt with by the people who deal in them, provided that there is a market for these types of goods. This principle is well known as classification on the basis of trade parlance. This is an accepted form of construction. It is a well-known principle that if the definition of a particular expression is not given, it must be understood in its popular or common sense viz. in the sense how that expression is used everyday by those who use or deal with those goods. The copy of the judgment is attached as Exhibit 4. 2.9. The Apex Court has laid down as to when the common parlance test can be used. It has provided that the following conditions need to be satisfied to call for common parlance test. These are; No meaning has been attributed in the statute There is an open market for such goods The above position has been succinctly encapsulated by the Hon ble Bombay High Court in the
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st or commonsense rule of interpretation One the basis of the above judgments, it can be concluded that either the common parlance or the user test should be applied in interpreting a word not defined by the statute. 2.11 In the present instance, the conditions laid down for applying the common parlance test as described above (i.e. not defined in the statute and having an open market) are satisfied. Hence, it is humbly submitted that the word bread should be understood in the sense in which it is understood by the common man and by any common trader in the food industry. 2.12. In this regard, the Applicant wishes to submit that it has been engaged in manufacturing and supplying leavened flatbreads including Naan, Kulcha, and variants of these type of leavened flatbreads referred to internationally in different countries as Pitta bread, Chalupa, Corn bread, Leavened Flatbreads and Unfolded Leavened Flatbread. 2.13. Basis the above, we wish to further submit that the Applicant has been
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understand the said phrase. 2.16. The phrase Served for consumption in common parlance indicates served in hotels, restaurants, eating houses and meant for immediate consumption. In this regard, the Applicant wishes to submit the fact that it does not serve any of its leavened flatbreads for immediate consumption to its customers. 2.17. In this regard, the Applicant places reliance on the judgement delivered by tribunal in case of East India Hotel on 31 March, 2009. The issue before the said tribunal was whether bread sold from the shop in the shopping arcade of the Five Star Hotel as counter sale is covered by the schedule entry A-4 of the BST Act or as covered by the schedule entry C-II-1 5. The entries A-4 & C-11-15 at the time of decision were as follows: A-4: Bread in loaf or rolls or in slices, toasted or otherwise except when sewed for consumption in any public restaurant including any eating house, hotel, refreshment room or boarding establishment or any part thereof which
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on. Thus, we strongly believe that these products are covered under Schedule Entry No. 97 of Exemption Notification and are eligible for exemption on supply of GST. 2.19. We wish to further submit that the Applicant craves leave to make/edit/modify submissions before the hearing or to elaborate upon the above submitted submissions at or before the hearing of the application, as may be relevant. 2.20: Without prejudice to the above mentioned submission, in case the leavened flatbreads manufactured by the Applicant does not qualify as bread within the meaning of Rate Notification, we request your good office to provide ruling on its possible alternate classification under below mentioned entry considering the facts and circumstances of the case (i) Entry No. 99 of Schedule of Rate Notification, which stands for Pizza Bread; or (ii) Entry No. 13 of Schedule Ill of Rate Notification, which stands for Malt extract, food preparations of flour, groats, meal, starch or malt extract not contain
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Strips be classified (i) as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis, not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905]on a totally defatted basis not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905) under Entry No. 13 of Schedule III of Rate Notification; or (ii) Any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit Applicant s interpretation of law or facts 3.1 The Department of Revenue, Ministry of Finance, has issued a notification number 01/2017-Central Tax (Rate) dated 28 June 2017 providing exemptions on intra-state
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tion provided under the Customs Tariff Act, 1975 with respect to Heading 1905 32 90. The relevant entry is attached herewith as Exhibit 2. The said Chapter 19 does not provide any clarification with respect to the phrase Waffles and Wafers in the chapter notes, heading notes etc. Dictionary meaning of the term Wafers 3.4 The Webster Dictionary has defined the term wafers as a thin crisp cracker. In this regard, we wish to draw your kind attention towards the Exhibit 1 wherein we have provided additional information on the manufacturing process for Corn Chips, Corn Taco and Corn Taco Strips. The products are manufactured by the Applicant using various ingredients including masa flour, water, small quantities of cellulose gum, citric acid, guar gum etc. Upon raw material intake, the ingredients go through various processes including mixing, dough dividing, baking and cooling. After the cooling process, the products are packed and labelled and subsequently stored and transported at -18 De
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s to be interpreted by understanding its meaning under the common parlance. It has provided that the following conditions need to be satisfied to call for common parlance test. No meaning has been attributed in the statute There is an open market for such goods. 3.9 Another test akin to the common parlance test is the commercial parlance test . According to this test, items in taxing statutes should be judged and analysed on the basis of how these expressions are used in the trade or industry or in the market or, in other words how these are dealt with by the people who dealt in them. Though the common parlance or commercial parlance tests are the generally accepted tests, various other tests have been evolved from time to time to interpret items of taxing statutes. One of such tests is commonsense test or commonsense rule of interpretation 3.10 In the present instance, wafers are not defined in the Customs Tariff Act, 1975. Further, there is a common market for trade in such goods. He
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aphs, the user test can be used to determine the appropriate classification of a product. 3.15 The use of wafers is as an snack. It is generally enjoyed by consumers as a tasty interlude between meals. Corn Chips, Corn Taco and Corn Taco Strips are similarly used as snacks that can be enjoyed in between meals. 3.16 It is also worthwhile noting that these products are on sale on online platforms in the same category that wafers like Lays, Kurkure etc. are sold. Hence, it can be inferred that users perceive such products as Wafers and consume them in the same fashion as they consume any other wafers. 3.17 Hence, it is humbly submitted that even on the basis of the end-use based test, Corn Chips, Corn Taco and Corn Taco Strips products manufactured by the Applicant should be classified as wafers under Chapter 1905 32 90 subject to GST accordingly. Contextual interpretation 3.18 Snacks such as Corn Chips, Corn Taco and Corn Taco Strips are seen as an alternative to potato chips, cream wafe
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oung children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905] on a totally defatted basis not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905); or (ii) Any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit. Applicants Interpretation of facts or law with regards to Question No. 4 Question 4- Whether on facts and circumstances of the case, Pancakes supplied be treated as All Goods ie. Waffles and wafers other than coated with chocolate or containing chocolate; biscuits; Pastries and cakes (other than pizza bread, khakhra, plain chapatti or roti, Waffles and wafers coated with chocolate or containing chocolate, papad, bread] as mentioned under Entry No. 16 of Schedule III of Rate Notifications. If not, whether on facts and circumstances of the case, the
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t to understand the clarification as provided under the Customs Tariff Act, 1975 to understand the meaning of the term Pancake. However, the said term has not been defined anywhere in Customs Tariff Act, 1975. Thus, it is necessary to refer to meaning of Pancake as known in common parlance as the said term is not defined under Customs Tariff Act, 1975. Dictionary meaning of term Pancakes 4.4 In this connection, we refer to dictionary meaning of the term Pancake . The Webster Dictionary defines it as a flat cake made of thin batter and cooked (as on a griddle) on both sides . Pancakes are generally prepared from starch based batter. 4.5 The products are manufactured by the Applicant using various ingredients including flour, water, sugar, salt, milk, syrup, vegetable oil etc. Upon raw material intake, the ingredients go through various processes including mixing, dough dividing, baking on a hot plate on both sides and cooling- After the cooling process, the pancake is packed and labelle
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t your good office to provide ruling on its possible alternate classification under any other Schedule Entry as Rate Notification or Exemption Notification as your good office thinks fit. Applicants interpretation of facts or law with regards to Question No. 5 Question 5- Whether based on the facts and circumstances of the case, pizza bread supplied by the Applicant be covered under Entry No. 99 of Schedule / of Rate Notifications If not, whether on facts and circumstances of the caser the Pizza Base be classified any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit Applicant s interpretation of law or facts 5.1 Basis the plain reading of Rate Notification, the Applicant believes that pizza bread should get classified under the entry number 99 of Schedule / of the Rate Notifications 5.2 The term Pizza Bread has not been defined in the Rate Notification. However, it is mentioned that the tariff item, sub-heading, heading and chapter
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s Tariff Act, 1975. Common Parlance Theory 5.5 It is humbly submitted that the Applicant manufactures pizza bread . The pizza bread is subsequently used as the bread on which toppings such as cheese and sauce are added by the customer or end consumer. Such bread is commonly known as pizza bread in grocery stores across the country, people purchase pizza bread in order to prepare pizzas at home using their own ingredients for toppings. Customers in the foodservice channel, such as restaurants, also purchase pizza bread that they apply a topping to before heating it up or cooking it and sending the finished product to their customers. 5.6 Basis the plain reading of the notification and the meaning of the word pizza bread under common parlance, the Applicant submits that entry number 99 of Schedule I to the Rate Notifications should apply and GST to be levied accordingly. 5.7 Without prejudice to the above mentioned submission, in case the product manufactured by the Applicant does not qu
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. Ingredients S. No. Ingredients 1. Maida 1. Maida 2. Water 2. Atta 3. Glycerine 3. Water 4. Wheat Gluten 4. Vanaspati Ghee 5. Salt 5. Palmolein Oil 6. Sugar 6. Glycerine 7. Yeast 7. L-Cysteine HCI 8. Baking Powder 8. Salt 9. Kalonji Seed 9. Powerflex 10. Hydroxypropyl Methyl Cellulose 10. Dimodaan 11. Ultrasoft 11. Sugar 12. Calcium Propionate 12. Sodium Acid Pyro Phosphate 13. Kalonaji Oil 13. Acecol Gaur Gum Leavened Flatbread-Unfolded Unleavened Flatbread- Tortilla S. No. Ingredients S. No. Ingredients 1. Maida – High Protein 1. Maida 2. Water 2. Water 3. Glycerine 3. Palmolein Oil 4. Wheat Gluten 4. Glycerine 5. Salt 5. L-Cysterine 6. Sugar 6. Sodium Bi Carbonate 7. Yeast 7. Salt 8. Baking Powder 8. Powerflex 9. Kalonji Seed 9. Dimodaan 10. Hydroxypropyl Methyl Cellulose 10. Sugar 11. Ultrasoft 11. Sodium Acid Pyro Phosphate 12. Calcium Propionate 12. Acecol Gaur Gum 13. Kalonaji Oil 13. Calcium Propionate 14. Fumaric Acid 15. Grindsted Protex Unleavened Flatbread-Chapati Leavened
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um propionate 9. Raising Agent 9. Milk 10. Yeast 10. Sunflower Oil 11. Acidity regulator 11. Golden Syrup 12. Preservative 12. Vanilla Flavor 13. Thickener 13. Whey Powder 14. Flour treatment agent 14. Detam List of Ingredients Leavened Flatbread-Pita Bread Corn Taco S. No. Ingredients S. No. Ingredients 1. Tandoori Atta 1. Masa flour 2. Atta 2. Water 3. Water 3. Cal. Prop 4. Wheat Gluten 4. Citric Acid 5. Salt 5. Cellulose Gum 6. Yeast 6. Guar Gum Leavened Flatbread-Chalupa Leavened Flatbread-Kulcha S. No. Ingredients S. No. Ingredients 1. Maida 1. Maida 2. Sunflower Oil 2. Vinegar 3. Water 3. Water 4. Rice Flour 4. Sugar 5. TBBI 5. Salt 6. Yeast 6. Yeast 7. Salt 7. Baking Powder 8. Sugar 8. Kalonji 9. Gluten Gluten FLOW CHART ¯ Raw Material Intake ¯ Raw Materials Storage ¯ Premixing and sieving ¯ Mixing ¯ Dough Dividing ¯ Baking In Oven ¯ Online Cooling for 25 mins @ 15-20 oc ¯ Online inspection (Sorting) ¯ Stacking ¯ Packaging &
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ited (the Applicant or Company ) a private limited company incorporated under the provisions of the Companies Act, 1956 holding GST registration number 27AACCH2133E1Z3, have filed an advance ruling application on 23 May 2018 for the classification of products manufactured by and supplied by the Company. In this connection, we have attended a personal h earing for the acceptance or rejection of the application of advance ruling under sub section (2) of section 98 of Central and Maharashtra Goods and Service Tax Act, 2017 (the Act) on 3 July 2018. During the course of the personal hearing, the authorized representative of the Office of Assistant Commissioner of State Tax (the Nodal Officer) has submitted a letter providing views on the classification of bakery products manufactured and supplied by the Applicant. In the letter, the learned Nodal Officer has given his opinion in respect of the classification of bakery products, as under: a. Indian food stuff like Roti, Plain Roti to be cla
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. 16 of Schedule III under Chapter heading 1905; and h. Pizza Bread qualify as Pizza Bread under Entry No. 99 of Schedule l. i. At the outset, the Applicant most respectfully wishes to submit that the letter has been prepared without giving due regards to all the facts of the case and the submissions made by the Company till date. The Applicant has provided a detailed list of ingredients, manufacturing process charts, purchase orders, tax invoices and detailed interpretation about the proposed classification of bakery products to enable your office to arrive at a conclusion with respect to the classification of the bakery products under consideration. After reviewing the letter issued by the learned Nodal Officer, we have observed that their interpretation on the classification of bakery products such as Wafer Product, Pancakes and Pizza Bread are in consensus with the Applicant. However, the Applicant has different views to the opinions expressed by the learned Nodal Officer on the c
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tha Rolls 1.1 The Applicant wishes to submit that learned Nodal Officer has not considered ingredients and the manufacturing processes used while manufacturing unleavened flatbreads. In the letter, it was mentioned that (i) the food stuff such as Paratha, Paratha Rolls, Roti Rolls shall be classified as per the common parlance test as laid down by the Hon ble Supreme Court of India (ii) Indian food stuff products such as Paratha, Paratha Rolls, Roti Rolls cannot be identified as Plain Roti or Roti. (iii) The manufacturing process and ingredients are different than that of Plain Roti or Roti. Thus, the same would be covered under Residual Entry. 1.2. Basic the review of submissions of learned Nodal Officer, we have observed that they have applied following tests to classify unleavened flatbreads during GST regime under: a. Common Parlance Test; b. Ingredient Test; and c. Manufacturing process Test. Common Parlance Test 1.3 With respect to Common Parlance Test, we wish to reiterate our s
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tion of such as Roti Rolls, Paratha, Paratha Rolls, Tortilla Wraps, Tortilla, Wraps, Paratha Wraps are the same or similar to Plain Chapatti or Roti. 1.5 At this juncture, it is also important to note the ruling of the Apex Court of India in the case of M/s. O K Play (India) Limited V. Commissioner of Central Excise, Delhi-III, Gurgaon = 2005 (2) TMI 114 – SUPREME COURT OF INDIA wherein it was mentioned that it is important to bear in mind that functional utility, design, shape and predominant usage have also got to be taken into account while determining the classification of an item . These aid and assistance of the Apex Court of India would be more important than the names used in the trade or common parlance in the context of Classification. A copy of the same is enclosed as Annexure 2. The size, shape and weight of the unleavened flatbreads produced by the Company are the same or similar and the predominant usage or function of the unleavened flatbreads is as an underlying carrier
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ied by protein or vegetables and sauce and hence, shall be classified as Plain Chapatti or Roti. Ingredient Test 2. the learned Nodal Officer has further mentioned that the ingredients used for variants of unleavened flatbreads such as Roti Rolls, Paratha and Paratha Rolls are different than Plain Roti or Roti as mentioned under Entry No. 99 A of Schedule I of Notification No. 01/2017-lntegrated Tax (Rate) dated 28 June 2017, Notification Number 1/2017-Central Tax (Rate), dated 28 June 2017 and Notification Number 1/2017-State Tax (Rate) No. MGST1017/ C.R. 104/Taxation-1, dated 29 June 2017 (collectively referred to as the Rate Notifications ). 3. We wish to reiterate the fact that the essential ingredients for preparation of Plain Chapatti and Roti are the same as those are used for manufacturing Tortilla, Tortilla Wraps, Wraps, Roti Rolls, Paratha and Paratha Wraps. The essential ingredients shall be taken to mean those ingredients which gives essential and basic character of the pro
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ed manufacturing flow charts in respect of all variants of unleavened flatbread in its original application. 6. The range of unleavened flatbreads manufactured by the Company, including Roti, Roti Rolls, Paratha, Tortilla, Tortilla Wraps and Wraps are produced on the same production line using the same or similar production methods and processes. The flow chart included in the original application shows that the Applicant follows the same or similar processes for all variants of unleavened flatbreads. Upon raw material intake, the ingredients go through various processes including mixing, proofing, dough dividing, baking and cooling. After the cooling process, the unleavened flatbread is packed and labelled and subsequently stored and transported at -18 Degree Celsius temperature or transported ambient. 7. It shall be noted that the residual category was introduced for those product categories, which cannot be classified under any of the schedules of Rate Notification. The learned Noda
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d under residual entry 2. Naan 1. Naan cannot fall under Entry No. 97 of Exemption Notification as it is commonly used as a Roti in South Asia Region 2. By applying common parlance test, common man cannot say Naan as Bread 3. It is used as a Roti eaten with curry in South East Asia 4. Accordingly, the same cannot be classified under Entry No. 97 of Exemption Notification. Hence, the same shall be covered under residual entry 3. Pita Bread and Kulcha 1. Dealer has itself applied tax rate at 2.5% in the invoices raised by him and Kulcha 2. Accordingly, the same cannot be classified under Entry No. 97 of Exemption Notification. Hence, the same shall be covered under residual entry 2.2. In addition to above, while denying exemption under Entry No. 97 of Notification Number 02 Number 2/2017- Integrated Tax (Rate), dated 28 June 2017, Notification Number 2/2017-Central Tax (Rate), dated 28 June 2017 and Notification Number 2/2017-State Tax (Rate) No. MGST 1017/C.R. (103)(1)/Taxation-1, dated
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missions made in the application for advance ruling from Para 2.1 till Para 2.18 in Annexure III wherein we have provided our submissions with respect to applicability of exemption in respect of all variants of leavened flatbreads considering above mentioned tests. We have provided below our additional responses to the contentions of learned Nodal Officer with respect to the classification of leavened flatbread. Leavened Flatbread – Chalupa 2.5. The learned Nodal Officer has mentioned that: a Chalupa is a specialty of Mexico. Traditional Chalupa are small, thick, boat shaped fried maza topped only with salsa, cheese and shredded lettua. These are filled with various ingredients such as chicken, pork, chopped onion etc. So, in view of the manufacturing process and type of ingredients used in it, so the Chalupa could not fall under Entry No. 97 of the Exemption Notification. It would be covered under residual entry and taxable at 9% in CGST and MGST Act . 2.6. In this connection, we wish
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the customer can include their own sauce, filling, protein and vegetables in the bread before serving the final product to the end consumer. Thus, the said contention will not hold good factually. 2.8. Additionally, the Applicant follows the same or similar manufacturing processes as those applicable for manufacturing bread. The Applicant strongly believes that all variants of leavened flatbread shall be classified as Bread within the meaning of Entry No. 97 of Exemption Notification. Leavened Flatbread – Naan 2.9. The learned Nodal Officer has further mentioned that Naan cannot fall under Entry No. 97 of Exemption Notification as it is commonly used as Roti in South Asia region. By applying common parlance test, common man cannot say Naan as a bread. It is used as a Roti, eaten with curry in South Asia. So, in my opinion Naan cannot be held as leavened flatbread and treated as exempted product. In my opinion the food products ie. Naan would be covered under residual entry and taxable
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all variants of leavened flatbreads. Upon raw material intake, the ingredients go through various processes including mixing, proofing, dough dividing, baking and cooling. After the cooling process, the leavened flatbread is packed and labelled and subsequently stored and transported at -18 Degree Celsius temperature or transported ambient. 2.13. Without prejudice to above mentioned submissions and submissions made in application for advance ruling, we wish to submit that the learned Nodal Officer confirmed that Naan is used as a Roti, which is eaten with curry in South Asia. Considering the same, it shall be classified under Entry NO. 99A of Schedule I of Rate Notification ie. Plain Chapatti or Roti. However, the learned Nodal Officer has classified the same under residual category without providing any legal justification to the same. 2.14. In addition to above, we wish to further highlight the fact that the learned Nodal Officer did not apply the End-User Test while determining the
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7. Moreover, the Applicant has discharged GST liability for leavened flatbread to the extent of 2.5% of CGST and MGST on a conservative basis. Leavened flatbreads not served for immediate consumption 2.18. While denying the exemption under Entry No. 97 of Exemption Notification, it was further mentioned that food products like Naan, Pita Bread, Kulcha, Leavened Bread can be served for consumption. These food products are ready for consumption. They are not raw or unfinished form. Ready to serve foods should be construed as a food which is ready to eat. The Schedule Entry No. 97 refers to bread except when served for immediate consumption. However, it is clear that ready to serve means ready to eat . There is no distinction between them. Food is not necessarily served only in Hotel. Food is also served at home. Hence, dealers contention regarding served for immediate consumption is misinterpretation of the term . 2.19. In this connection, we wish to reiterate our submissions made in the
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In addition, frozen bread does not taste good. The points above are relevant if the bread is bought by a customer in the foodservice channel such as hotels and restaurants or if the frozen bread is consumed in the home. Therefore, the breads that the Company supplies are not served for immediate consumption and are not ready to serve. 2.21. The customer or end consumer the thaws the frozen bread and in many cases then heats the bread up using an oven, microwave, tawa or grill. After this customers or the end consumer will add a sauce and filling to the bread which acts as a carrier. The bread does not taste very good if is supplied without any sauce or a filling because the product would be very dry and not taste good. 2.22. Considering the points above, the Applicant strongly believes that it fulfils all the necessary conditions, which are eligible for claiming exemptions under Exemption Notification. 2.23. Without prejudice to above submissions, we wish to further submit the fact tha
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est and ingredient test. Should your office require any additional information / documentation in order to enable your office to arrive at a final conclusion, we shall be glad to furnish the same, 03. CONTENTION – AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- It is submitted that, Issue on which advance ruling is required: M/s. Signature International Foods India Pvt. Ltd. is the company engaged in the business of trading and exporting bakery product including flat breads. The dealer has been engaged in manufacturing and supplying of the unleavened flat breads, which include plain chappati, Roti, Paratha Wraps, Tortilla wraps, wraps, Roti Rolls. The dealer also trader in manufacturing of bread products, Pancake, Pizza Bread, wafers, corn chips corn taco, corn taco strips. The dealer seeks clarification of tax rate in respect of following commodities. 1 Unleavened flat breads 2 Leavened flat breads. 3 Corn chips, Corn Taco, Corn Taco strips. 4
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rolls, Roti Rolls, we can t identify these food products as plain Roti or Roti The manufacturing process and ingredients are different than that of plain Roti or Roti. Common man can t say Paratha or Roti Rolls as a plain Roti, Roti. So impugned product Paratha, Paratha Rolls, Roti Rolls would not fall under entry 99(A) of CGST/MGST Act. In my opinion these food products i.e. paratha, Paratha rolls, Roti Rolls would be covered under residuary entry and taxable at 9% in CGST and MGST. Leavened flat bread – Dealer has treated leavened flat bread under Entry No. 97 of CGST Act. Entry No.97 stands for Bread (branded or otherwise) except when served for consumption and pizza bread. In Leavened flat breads such as Naan, Chalupa, Pita bread, Kalucha, unfold leavened flat breads are also manufactured & sold by the dealer. Chalupa -A chalupa is speciality of south central Mexico. Traditional Chalupas are small, thick, boat shaped fried maza topped only with salra, cheese and shredded lettua
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ood products i.e. Naan would be covered under residuary entry and taxable at 9% in CGST and MGST. Pita bread and Kulcha -Pita bread & Kulcha are leavened bread. But dealer himself applied tax rate at 2.5% in the invoices raised by him. But these product could not be classified under entry 97 as exempted goods. Pita bread and Kulcha cannot be termed as bread. So the products like Naan, Pita Bread, Kulcha, levened bread can be served for consumption. These food products are ready for consumption. They are not raw or unfinished from. Ready to serve foods should be construed as a food which is ready to eat. The schedule entry No. 97 refer to breads except when served for consumption. Dealer has taken meaning of served for Consumption as in food served in hotel, restaurant etc. However it is clear that ready-to-serve means ready-to-eat . There is no distinction between ready-to-eat foods and ready to serve foods Food is not necessarily served only in a Hotel. Food is also served in a ho
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Pizza Bread -Pizza Bread supplied by the applicant is covered under entry No. 99 of schedule I. Dealer has rightly clarified the food product ie. Pizza Bread under entry No.99 of schedule I having tax rate @ 2.5% CGST and 2.5 MGST. Hence I reproduce following clarification of various food product. Sr. No. Schedule entry Tax rate 1. Unleavened Flat breads i) Roti, Plain Roti 99 (A) 2.5% CGST 2.5% MGST ii) Paratha, Paratha Rolls, Roti Rolls Residual 9% CGST 9% MGST 2. Leavened Flat breads Residual 9% CGST 9% MGST i) Naan, ii) Chalupa, iii) Pita Bread iv) Kulcha 3. Corn chips, Corn Taco, Corn Taco Strips Entry No. 16 Schedule III 9% CGST 9% MGST 4. Pancake Entry No. 16 Schedule III 9% CGST 9% MGST 5. Pizza Bread Entry No. 99 Schedule I 2.5% CGST 2.5% MGST Additional submissions made by concern officer on 25.07.2018 The dealer has been engaged in manufacturing and supplying of the unleavened flat breads, which include plain chappati, Roti, Paratha Wraps, Tortilla wraps, wraps, Roti Rolls.
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oti rolls) Mixing (Atta+ water+ palmolein oil+wheat gluten+salt+dimodaanHp-1+ sugar+ baking powder) ¯ Dough dividing ¯ Baking in oven ¯ Online cooling for 25min@15-20c ¯ Online inspection (sorting) ¯ Stacking ¯ Packaging and labelling Blast freezing@-30oto 350c ¯ Metal detection ¯ Packaging ¯ Collation to pallets ¯ Finished goods storage @-18 c ¯ Dispatch in frozen vehicle@-18c Opinion of Jurisdiction Officer-So far as Indian food stuffs like Roti, Plain Roti is concerned it can be classified under Tariff heading 2106 as per notification no.35/2017 Integrated tax (Rate) Dt. 13/10/2017 under Schedule-I entry no.99 (A) and should be taxed at CGST 2.5% and SGST 2.5% So if we apply common parlance test to these Indian food stuffs like paratha , Paratha rolls, Roti Rolls , we can identify these food products as plain roti or roti The manufacturing process is same, but ingredients are different than that of plain Roti or Roti. In my opin
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ould not fall under Entry no-97 of Exemption notification. It cannot be classified as a bread. In my opinion this chalupa would be covered under Schedule- Ill entry no,453 i.e. residuary entry and taxable at 9% in CGST and MGST. B) Naan – A typical Naan recipe involves mixing wheat flour with salt, a yeast culture and enough yogurt to make smooth, elastic enough. The dough is kneaded for few minutes. Then dough is divided into balls which are flattered and cooked. So this product Naan can t fall under entry no.97 of Exemption notification as it is commonly used as roti in South Asia region. By applying common parlance test to this product, common man can t say Naan as a bread. It is used as a Roti, eaten with curry in South East Asia. So in my opinion Naan cannot be held as leavened bread and treated as exempted product. In my opinion the food products i.e. Naan would be covered under residuary entry under Schedule -III entry n.453 and taxable at 9% in (CST and MGST. C) Pita bread and
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n of the term so all the food product like Naan, Chalupa, Pita bread, Kulcha will fall under residual entry i.e. Schedule -III entry n.453 and would be taxable at 9% CGST and 9% MGST Act. III. Corn Chips, Corn Taco, Corn Taco strips – Applicant s interpretation- Dealer is manufactures of food products like corn chips, corn Taco, Corn Taco strips. Dealer has classified these products under entry No. 16 of schedule Ill. Manufacturing process- (Corn chips, Corn taco, Corn taco strips) Mixing (Masa flour+ water+ calcium prop. + citric acid+ cellulose gum+ gaur gum) ¯ Dough sheeting ¯ Baking in oven ¯ Online cooling @ambient temperature ¯ Online inspection (sorting) ¯ Stacking ¯ Packaging and labelling ¯ Spiral blast freezing@-30 to 35 ¯ Metal detection ¯ Packaging ¯ Collation to pallets ¯ Finished goods storage @<-18 c ¯ Dispatch in frozen vehicle @.18 0 Opinion of Jurisdiction Officer- Dealer has rightly classified these produ
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milk, butter. Pancake are known as cakes . In many opinion Pancake manufactured by the applicant qualify as cakes within the meaning of Rate notification clarifying the product under entry 16 schedule III under chapter heading 1905. V) Pizza Bread – Applicant s interpretation- Dealer has classified Pizza bread as Entry no.99 of Schedule-I of CGST Act. Opinion of Jurisdiction Officer Pizza Bread supplied by the applicant is covered under entry No. 99 of schedule l. Dealer has rightly classified the food product ie. Pizza Bread under entry No. 99 of schedule-I having tax rate @ 2.5% CGST and 2.5%MGST. Hence I reproduce following clarification of various food product. Sr. No. Products Supplied Schedule entry Tax rate 1. Unleavened Flat breads i) Roti, Plain Roti Schedule-1 Entry no. 99 (A) 2.5% CGST 2.5% MGST ii) Paratha, Paratha Rolls, Roti Rolls Schedule-1 Entry no. 99 (A) 2.5% CGST 2.5% MGST 2. Leavened Flat breads Schedule-III Entry no. 453 (A) 9% CGST 9% MGST i) Naan, ii) Chalupa, i
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written submissions. 05. OBSERVATIONS We have perused the records on file and gone through the facts of the case and the submissions made by the applicant and the department. We find that:- 1. The Applicant, a private limited company, holding the GST registration number (GSTIN ) 27AACCH2133E1Z3 with effect from 01 July 2017, is located in Nashik, Maharashtra. The company is engaged in the business of, inter alia, manufacturing, trading and exporting bakery products which includes flatbreads. The Applicant supplies products to customers and distributors in India and in overseas markets including the Middle East, South East Asia, Africa and Australia. Applicant supplies two types of flatbreads like Unleavened and leavened flatbreads to retailers, canteens, airlines, hotels, hospitals, schools, restaurants, wholesalers, distributors and other food service operators located in India and overseas. The details of manufacturing process and ingredients required are in short as thus, A) Unleav
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redients including maida, tandoori atta, atta, water, rice flour, oil, yeast, salt, sugar etc. Upon raw material intake, the ingredients go through various processes including mixing, proofing, dough dividing, baking and cooling. After the cooling process, the leavened bread is packed, the packet is labelled and subsequently stored and transported at -18 Degree Celsius temperature or transported ambient. C) Wafer s includes the – Corn Chips, Corn Taco and Corn Taco Strips to its customers and distributors. The products are manufactured by the Applicant using various ingredients including masa flour, water, small quantities of cellulose gum, citric acid, guar gum etc. Upon raw material intake, the ingredients go through various processes including mixing, dough dividing, baking and cooling. After the cooling process, the products are packed, the packets are labelled and subsequently stored and transported at -18 Degree Celsius temperature. Upon receipt of these products, the customer or
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intake, the ingredients go through various processes including mixing, proofing, dough dividing, baking and cooling. After the cooling process, the pizza bread is packed and labelled and subsequently stored and transported at – 18 Degree Celsius temperature. Applicant has approached this authority and has raised questions as above with a request to classify the products. The Central Point of discussion in this application is the applicability of entry No.99A of Schedule to the Notification No. 1/2017 – IGST Act dated 28/06/2017. By virtue of this notification the food products such as Khakara, Plain Chapatti or Roti are liable to GST @ 5%. The Applicant has approached this authority with a prayer to classify the various food products sold by the appellant and the applicable rate of tax. We shall now discuss and examine each question separately as below: Que. 1. Whether on facts and circumstances of the case, the Unleavened Flatbreads be treated as Khakra, plain chapatti or roti under
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uded [other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905]on a totally defatted basis not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905) under Entry No. 13 of Schedule III of Rate Notification or (iii) Any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit. With respect to this question applicant submits that the company is engaged in the manufacturing trading and exporting of bakery products i.e. on Unleavened Flat Brads such as plain chapatti and variants of chapatti such as Tortilla, Tortilla wraps, roti rolls, wraps, roti, chapatti and paratha and paratha wraps. During the course of final hearing applicant was instructed to provide products, detailed list of ingredients, manufacturing process chart
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GST and SGST Act. However, with respect to food stuffs such as paratha, paratha wraps, roti rolls, cannot be classified in the above entry and by applying common parlance test these would be covered under residual entry and taxable@9% each under CGST and SGST Act. From the perusal of notification 1/2017 and 34/2017 cited supra we find that the expression khakara, plain chapatti or roti are stated as covered by these notifications but we find that no details as to what products, apart from these would be covered or, no definition of these products are given in these Notifications. It is therefore necessary to refer to the meaning of this term as per dictionary meaning or Wikipedia Merriam Webster- Chapatti -a round flat unleavened bread of India i.e. usually made of whole wheat flour and cooked on a griddle. Chapatti is also called fulka. Roti- a roti is generally made out of refined flour and is cooked in tandoor. This roti may be called tandoori roti. Applicant has raised question bef
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htra) and Rotla (in Gujrat). In view of this we agree to the contention that the products such as Tortilla wraps. Roti rolls, paratha and paratha wraps are covered by the scope of entry 99A of notification 34/2017. During the course of hearing, revenue officer has strongly opposed the contention of the applicant that paratha or paratha wraps are covered by the scope of entry 99A cited supra. However the officer in the additional submissions on 25/07/2018 submitted that in view of common parlance test food stuffs like paratha, paratha rolls, roti rolls, can be identified as plain roti or roti and thus opined that these food products would be covered under entry99A and taxable @2.5% each. We find that the food product paratha as is available in hotels and restaurants is plain, folded or stuffed. By applying the common parlance test we understand paratha as different and distinct food commodity from roti, chapatti etc. The product before us is examined from this view point. The product is
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e classified: (i) Pizza Bread as mentioned under Entry No. 99 of Schedule I of Rate Notifications; or (ii) as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis, not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905]on a totally defatted basis not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905) under Entry No. 13 of Schedule III of Rate Notification or (iii) Any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit In connection with the products covered by this question which are leavened Flatbreads including Naan, Kulcha, and variants of t
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atbreads and crepes which are an integral part of Indian cuisine. Definition of naan (COLLINS ENGLISH DICTIONARY) Naan or naan bread is a type of bread that comes in a large, round, flat piece and is usually eaten with Indian food. Source: Wikipedia Naan is a leavened oven-baked flatbread found in the cuisines mainly of Middle East, Central Asia and Indian subcontinent. MERRIAM WEBSTER DICTIONARY : a round flat leavened bread especially of the Indian subcontinent THE FREE DICTIONARY BY FARLEX: A flat, leavened bread of northwest India, made of wheat flour and baked in a tandoor. Source: Wikipedia KULCHA: Kulcha is a type of mildly leavened flatbread that originated in the Indian subcontinent. It is a Punjabi variation of naan. Recipe Kulcha is made from maida flour, water, a pinch of salt and a leavening agent (yeast or old kulcha dough), mixed together by hand to make a very tight dough. In order to classify the products under a fiscal statue and in the absence of any such definition
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to the fitness of the matter of the statute. (3) On the other hand, . …. if it is a word which is of a technical or scientific character then it must be construed according to that which is its primary meaning, namely, its technical or scientific meaning. Applying the above principles, we have to find whether the product Naan and Kulcha can be treated as bread and covered by the scope of entry 97 of the exemption notification. It is true that as per dictionary meaning or Wikipedia large number of food items including Naan and Kulcha have been refereed as Indian breads. But the case before us is that the above product has not been defined under the Act or the notifications issued and in the absence of any such definitions it would be advisable to refer to the principals as referred above. Having regard to the principles laid down by the Supreme Court in case of M/s. Ramawatar cited supra we find that while classifying the product under fiscal statute the resort has to be to their pop
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or immediate consumption. We also agree with the applicant that the product does not use chicken, pork chopped onion etc. while manufacturing or supplying these products. Now we turn to another product – CHALUPA: MERRIAM WEBSTER DICTIONARY Definition of chalupa a fried corn tortilla sometimes shaped like a boat and usually filled with a savory mixture(as of meat, vegetables, or cheese) OXFORD ENGLISH LIVING DICTIONARY: A fried tortilla in the shape of a boat, with a spicy filling Source: Wikipedia CHALUPA: A chalupa (Spanish pronunciation: is a specialty of south-central Mexico, including the states of Puebla, Guerrero, and Oaxaca. Chalupas are made by pressing a thin layer of masa dough around the outside of a small mould, in the process creating a concave container resembling the boat of the same name, and then deep frying the result to produce crisp, shallow corn cups. These are filled with various ingredients such as shredded chicken, pork, chopped onion, chipotle pepper, red salsa
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de like a pocket, which can be filled with food Source: Wikipedia In many languages, the word pita refers not to flatbread, but to flaky pastries. Pita Bread is a yeast-leavened round flatbread baked from wheat flour, sometimes with a pocket. THE FREE DICTIONARY (Cookery) a flat rounded slightly leavened bread, originally from the Middle Fast, with a follow inside like pocket, which can be filled with food. Also called: Arab bread or Greek bread CAMBRIDGE DICTIONARY a round or oval flat bread that is hollow and can be filled with other food OXFORD ENGLISH LIVING DICTIONARY; Flat, hollow, slightly leavened bread which can be split open to hold a filling. With regards to Pita bread applicant is of the opinion that the product is bread covered by the scope of entry no. 97 of exemption notification. As per Webster dictionary the term bread has been defined as a usually baked and leavened food made of a mixture whose basic constituent is flour or meal. On the contrary as per definition and
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the Corn Chips, Corn Taco and Corn Taco Strips be classified. (i) as Malt ex-tract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis, not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905]on a totally defatted basis not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905) under Entry No. 13 of Schedule III of Rate Notification; or (ii) Any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit As observed by us in case of other products discussed herein above we also find that the term corn chips, corn taco, corn taco strips have not been defined under the A
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per Customs Tariff Heading as below: Entry -16 All goods i.e. Waffles and wafers other than coated with chocolate or containing chocolate, biscuits; Pastries and cakes (other than pizza bread, khakra, plain chapatti or roti, Waffles and wafers coated with chocolate or containing chocolate, papad, bread]. The details of tariff head as below, S.No. Chapter/Heading/Sub-heading Tariff item Description as per Schedule Heading Description in Custom Tariff Entire Customs Tariff Heading with sub Heading and Tariff Item 1 2 3 4 5 16. 1905 Pastry, cakes, biscuits and other bakers wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutic al use, sealing wafers, rice paper and similar products[other than pizza bread, khakhra, plain chapatti or roti, bread, rusks, toasted bread and similar toasted products BREAD, PASTRY, CAKES, BISCUITS AND OTHER BAKERS WARES, WHETHER OR NOT CONTAINING COCOA; COMMUNION WAFERS, EMPTY CACHETS OF KIND SUITABLE FOR PHAR
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bly. Further from the facts submitted by the applicant that the end consumer fry the chip products which make them crispy similar to the product such as wafers. The Corn chips, Corn taco and corn taco chips are variants of chips eaten as a snack. Considering the above facts we hold that the term wafers would include impugned products. And therefore these products would be classifiable under chapter 1905 3290 and liable to tax at @ 9% each under CGST and SGST Act. Que 4: Whether on facts and circumstances of the case, Pancakes supplied be treated as All Goods i.e. Waffles and wafers other than coated with chocolate or containing chocolate; biscuits; Pastries and cakes (other than pizza bread, khakhra, plain chapatti or roti, Waffles and wafers coated with chocolate or containing chocolate, papad, bread) as mentioned under Entry No. 16 of Schedule III of Rate Notifications. If not, whether on facts and circumstances of the case, the Pancakes be classified in any other Schedule Entry as p
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. We find that, Cake is mentioned under the chapter heading 1905 of customs and tariff Act 1975. The product cake is mentioned in the entry 16 under the head of All Goods i.e. waffles and wafers other than coated with chocolate or containing chocolate, biscuits; Pastries and cakes (other than pizza bread, khakhra, plain chapatti or roti, Waffles and wafers coated with chocolate or containing chocolate, papad, bread]. Therefore, we are of the view that the impugned the product Pancakes is covered under the chapter heading 19059010 under the entry 16 of schedule Ill of GST ACT and liable to tax at appropriate rate. Que 5: Whether on facts and circumstances of the case, Pizza Base supplied be treated as Pizza Bread as mentioned under Entry No. 99 of Schedule / of Rate Notifications. If not, whether on facts and circumstances of the case, the Pizza Base be classified in any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit The products a
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e rate. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) No. GST-ARA-26/2018-19/B-91 Mumbai, dt. 20.08.2018 Question 1:- Whether on facts and circumstances of the case, the Unleavened Flatbreads be treated as Khakra, plain chapatti or roti under Entry No. 99 A of Schedule / of Notification No. 01/2017-lntegrated Tax (Rate) dated 28 June 2017, Notification Number 1/2017-Central Tax (Rate), dated 28 June 2017 and Notification Number 1/2017-State Tax (Rate) No. MGST1017/ C.R. 104/Taxation-1, dated 29 June 2017 (collectively referred to as the Rate Notifications ) If not, whether on facts and circumstances of the case, the Unleavened Flatbreads be classified: (i) as bread as mentioned under Entry No. 97 of Notification Number 02 Number 2/2017-Integrated Tax (Rate), dated 28 June 2017, Notification Number 2/2017-CentraI Tax
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products such as plain chapatti, Tortilla, Tortilla Wraps, roti, Roti rolls , Wraps, Paratha and Paratha wraps are covered under Entry No. 99 A of Schedule 1 and they would be liable to tax @ 5% (2.5 % each for CGST and MGST and 5 % for IGST). Question 2:- Whether on facts and circumstances of the case, the Leavened Flatbreads be treated as as bread as mentioned under Entry No. 97 of Exemption Notifications If not, whether on facts and circumstances of the case, the Leavened Flatbreads be classified: (i) Pizza Bread as mentioned under Entry No. 99 of Schedule I ofRate Notifications; or (ii) as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis, not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905]on a totally defatted basi
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s If the same is not classifiable as wafer , whether on facts and circumstances of the case, the Corn Chips, Corn Taco and Corn Taco Strips be classified (i) as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis, not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905]on a totally defatted basis not elsewhere specified or included (other than preparations for infants or young children, put up for retail sale and mixes and doughs for the preparation of bakers wares of heading 1905) under Entry No. 13 of Schedule III of Rate Notification; or (ii) Any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit Answer :- The products like Corn Chips, Corn Taco and Corn , Taco Strips woul
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