In Re: M/s Prabhat Gudakhu Factory
GST
2019 (2) TMI 1525 – AUTHORITY FOR ADVANCE RULINGS, ODISHA – 2019 (23) G. S. T. L. 316 (A. A. R. – GST), [2019] 66 G S.T.R. 446 (AAR)
AUTHORITY FOR ADVANCE RULINGS, ODISHA – AAR
Dated:- 5-2-2019
06/Odisha-AAR/2018-19
GST
SRI ANAND SATPATHY, AND SRI NILANJAN PAN, IRS, MEMBER
Present for the Applicant -RAVI SHANKAR SISTLA, CA
Subject: GST Act, 2017-Advance Ruling U/s 98 on 'Classification of GUDAKHU'
1.0 M/s. Prabhat Gudakhu Factory, Jeypore, Koraput, Odisha, 764005(hereinafter referred to as the 'Applicant') assigned with GSTIN 21AACHA8243B272 having registered address At-Jyoti Mill Campus, Souraguda, Jeypore, Koraput, Odisha-764005 have filed an application on 08.11.2018 under Section 97 of CGST Act, 2017 & OGST Act, 2017 read with Rule 104 of CGST Rules 2017 & OGST Rules, 2017 in Form GST ARA-01 seeking an Advance Ruling on (i) 'Appropriate Classification of Gudakhu' under the GST Tariff Heading and (ii) 'Determination of
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hu is covered under the classification code 2403 11 10. The applicant substantiated such view as below.
2.1. The Hon'ble Odisha High Court has held in the case of Shamsuddln Akbar Khan and Co. as reported in 35 STC 179 = 1974 (7) TMI 114 – ORISSA HIGH COURT that “gudakhu is a kind of manufactured tobacco like cigarettes, cigars, cheroots, biri, chewing tobacco, and snuff and was very much akin to hookah tobacco”. Placing reliance on the aforesaid observations of the Hon'ble Court the applicant is of the view that Gudakhu should be classified under the HSN Code 2403 11 10 and having been specifically covered under this code, the same cannot be classified under the residual code of 2403 99 90 (All other products),
2.2 The residual code of 2403 9990 contains all other tobacco products in the nature of gutkha which are meant for chewing. The description of HSN classification 2403 9990 reads as “All goods, other than pan masala containing tobacco 'gutkha'… Therefore, the said classifica
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submission reiterating the stand taken earlier. In his considered opinion “Gudakhu” should be classified under the tariff heading ' 240311 10' and substantiated the argument by placing reliance upon a case decided by Hon'ble High Court of Odisha reported in 35 STC 179 = 1974 (7) TMI 114 – ORISSA HIGH COURT in the case of Shamsuddin Akbar Khan and Co.
4.0 We have considered the submissions made by the applicant in its application for advance ruling as well as the submissions made by the representative during personal hearing. We also considered the question & issues on which advance ruling is sought for by the applicant, relevant facts having bearing on the question / issue raised and the Applicant's understanding/interpretation of law in respect of the issue
4.1 In the instant application, Ruling has been sought for (i) 'appropriate classification of Gudakhu' under GST Tariff heading and (ii) 'Determination of the liability to pay NCCD (National Calamity Contingency Duty)'. The appli
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. Most of its composition materials are similar to Gutkha except areca nut. It is primarily applied on teeth and pressed and chewed. So, it should be, and rightly classified, under heading 'Other' with Sub- heading 'Other2403 99' and Tariff-head 'Other 2403 99 901 since it is entirely different by essential character by following general rules of interpretation from the tariff items 2403 11 10.
4.3 For ease of reference the classification of both the Tariff-item heading is reproduced below:
“2403 Other manufactured tobacco and manufactured tobacco substitutes; “Homogenized” or “Reconstituted” tobacco; tobacco. extracts and essences
-Smoking tobacco, whether or not containing tobacco substitute in any proportion:
2403 11 Water pipe tobacco specified in Sub )heading Note to this chapter:
2403 11 10 Hookah or Gudakhu Tobacco
-Other
2403 99 0ther
2403 99 10 – Chewing tobacco
2403 99 20 – Preparations containing chewing tobacco
2403 99 30 – Zarda scented tobacco
240
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the applicant is sold as a paste and is used as a tooth paste. Hence, it is distinctly different from hookah tobacco by its essential character and use. While hookah or gudakhu tobacco as classified under 2403 11 10 is used as a smoking tobacco through a water pipe, gudakhu manufactured by the applicant is sold in the form of a paste for use as a tooth paste and not as a smoking tobacco. In the scheme of classification of tobacco product for the purpose of assigning HSN Code under tariff sub-heading 2403 11, only water pipe tobacco intended for smoking in a water pipe are included and not any other form of tobacco. As explained above, the applicant is engaged in the manufacture of gudakhu in paste form only which is used only as a tooth paste and never used for smoking in a water pipe. As a result, it can never be classified under tariff sub-heading 2403 11.
4.5 As per the scheme of classification, tariff sub-heading 2403 99 is a residual sub-heading under which all forms of che
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the sub-heading 2403 99 only if the said item belongs to the family of chewing tobacco like 'gutkha', zarda or khaini is totally misplaced in as much as the said sub-heading also specifies other tobacco products such as cut tobacco, tobacco extracts and snuff etc. Therefore, the general rule of classification as relied upon by the applicant cannot be applied in the case of gudakhu as manufactured and sold by the applicant simply because it does not belong to the family of chewing tobacco such as zarda and gutkha.
4.6. Gudakhu as manufactured by the applicant is certainly not classified under any specific tariff item in any of the sub-headings under the Heading 24 03. Accordingly, it can be classified and rightly so under the residual tariff item 2403 99 90 – other' of the said Chapter Heading because of its composition, character and use.
4.7. As regards 'Determination of the liability to pay NCCD (National Calamity Contingency Duty)', it is clarified that the aforesaid duty is a le
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