The Tamil Nadu Authority of Advance Ruling (AAR) has held that 5% goods and service tax (GST) is applicable on ‘Maida Pappad’.
The bench of Balakrishna S. and B. Suseel Kumar has observed that Maida Pappad’ is nothing but uncooked/un-fried snack pellets, obtained through the process of extrusion, and as such they merit classification under chapter sub-heading 1905 90 30 of the Tariff. Further, by virtue of insertion of entry S.No.99B to Schedule I to Notification No.01/2017-CT (Rate) dated 28.06.2017, through the amendment Notification No.09/2023-Central Tax (Rate) dated 26.07.2023, they become liable to tax at the rate of 5% under GST (CGST-2.5% and SGST-2.5%), with effect from 27.07.2023 onwards.
The applicant, M/s. V K Samy Biscuits & Confectioneries is in the business of manufacturing Maida Pappad. The production process involves using Maida, small quantities of sugar, and oil as primary ingredients.
These ingredients are mixed to form a sheet of dough, which is subsequently cut into the required shapes. The formed dough is then dried in the oven, and the finished product is packaged in 10 Kg packs.
The product in this form is not ready for consumption and it requires frying in oil and the addition of flavours to render it edible. The Applicant has made a payment of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST Rules, 2017 and TNGST Rules, 2017, vide CIN IBIDC24043300618476 dated 30.04.2024, towards the application fees payable.
The applicant stated that HSN code of Papad is CTH 1905, and that the manufacturing process of papad is not extrusion and hence the same is not liable to tax at 5% in view of the Circular No.200/12/2023-GST dated 01.08.2023.
The snack pellets in un-fried or uncooked form, when manufactured through the process of extrusion, gets covered under this category, attracting GST at 5% (Schedule I). It has been clarified further under the said circular that Extruded Snack Pellets in ready-to-eat form will continue to attract GST at 18% (Schedule III).
The applicant sought the advance ruling on the issue whether the product of the applicant is a ‘Papad’ and whether the manufacturing process involved in the instant case involves the process of Extrusion.
The AAR held that the product, ‘Maida Pappad’ as referred to by the applicant in the instant case, are nothing but un-cooked, un-fried snack pellets, obtained through the process of extrusion, and that the same is liable to tax at the rate of 5% under GST (CGST – 2.5% and SGST – 2.5%), with effect from 27.07.2023 onwards, in view of entry S.No.99B of Schedule I to Notification No.Ol/2017-CT (Rate) dated 28.06.2017.
Ruling Details
Applicant Name: V K Samy Biscuits & Confectioneries
Date: 20.03.2025
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