Author: Khushi J Prajapati
The Gujarat Authority of Advance Ruling (AAR) has ruled that 5% GST will be applicable on Mix Mukhwas and roasted Til and ajwain.
The AAR bench, products consist mainly of sesame seeds and contain 60% of the ingredients in the first mix while the latter contains 97% of them. The products cannot be classified differently after cleaning, salting, adding citric acid, roasting, and sprinkling turmeric powder since all these operations do not change the fact that sesame is still the principal ingredient.
In addition, the applicant said there is no element of pan masala sugar chocolate preservatives or any other artificial flavoring substances in the mixes. They are purchased by customers who would like to have sesame seeds just like seed mixes.
Therefore, the AAR ruled that a GST at a rate of 5% will apply the ruling clarified that this product should be classified under HSN code 1207, which pertains to “Oilseeds and Oleaginous Fruits” rather than as a prepared food item.
Facts – In a query addressed to the Gujarat Authority for Advance Ruling (AAR), Co., which is involved in the making and selling of foodstuffs, sought clarity on the GST that applies to its products such as “Mix Mukhwas” and “Roasted Til & Ajwain”.
The applicant contended that these goods were deserving of tax exemption or reduced tax rates simply because they are items for direct consumption. They compared their products with other food items, which have either higher or lower GST rates.
The main question was whether such goods are exempt from the GST or if they can be charged a lower GST rate than 5% which applies to processed food items.
Case Details
Case Name: In re Bhagat Dhanadal Corporation
Appeal Number: Advance Ruling No. GUJ/GAAR/R/2024/13
Date of Judgment/Order: May 30, 2024
Court: Gujarat Authority for Advance Rulings (AAR)
Judges: Milind Kavatkar, Member SGST and Amit Kumar Mishra, Member CGST
