Gujarat AAAR had earlier revised AARorder and ruled 18 per cent GST
Tamil Nadu’s Appellate Authority for Advance Ruling (AAAR) has upheld that ready-to-cook dosai/idly/tiffin mix distinct from mixture of flour and will attract Goods & Services Tax at the rate of 18 per cent.
The appellant, Tiruchi-based Krishna Bhavan Foods and Sweets, moved the AAAR after the Authority for Advance Ruling (AAR) ruled that 18 per cent GST is chargeable on these products. It relied upon Gujarat’s AAR which had ruled that similar products would attract 5 per cent GST (in the matter of Dipak Kumar Kantilal Chotai). However, it may be noted that later Gujarat AAAR revised the ruling and said products will attract GST at the rate of 18 per cent.
The appellant manufactures and sells mixture of four of grains/cereals, pulses mixes with spices and condiments. Its products are mainly used for preparing Indian dishes such as Idly Mixes, Dosai Mixes, Tiffin Mixes ( Adai Mavoo , Millet Adai Mix, Uzhunthakai Mavoo , Ready Idiyappam , Bajji Mix), Health Mixes and Porridege Mixes. These mixtures of flour are commercially known as instant mixers of flour. The raw materials used for manufacturing of these products are pulses and grams, grains/cereals, spices etc.
The appellant argued that most of the ingredients are falling under the exempted category. Further, it mentioned that AAR failed to appreciate the real nature and intent of said products, which is manufactured and sold by it for the past several years, which is not liable to any tax either by sales tax authorities and Central excise authorities. “The Authority (AAR) further failed to appreciate the intention of the government and council to grant exemption on the food preparation,” it said.
The appellant put forward difference between ready-to-eat (RTE) and ready-to-cook (RTF) food products. In the former case, there is no need to further cooking and it applies to any product intended for human consumption without further preparation steps. In the matter of latter, they are raw but have been portioned and prepped as it is freshly frozen and most importantly, they need to be cooked at home before consumption. Appellant’s products fall into second category.
After going through all the facts AAAR observed that products mentioned here do contain the flour and same is not meant for supply as flour but meant as dosai mix, idly mix, vada mix, tiffin mix, healthy mix and porridge mix which are the products for human consumption by way of cooking as directed in the container label. Hence, these products are not mere mixture of dried leguminous vegetable or cereal. This means they will not attract GST at the rate of 5 per cent.
Earlier, in its order AAR had said the products in question are all food preparations in the form of powder. The dosai mixes and idli mixes are packed and sold as mixes that are to be mixed with water/boiled water/curd to make it as batter and the product sold is a powder and not batter, it had said while making it clear that these will attract GST at the rate of 18 per cent and not 5 per cent. Now, AAAR upheld this order.