The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the Goods and Service Tax (GST) at the rate of 12% is applicable on ‘Nizam Pakku’.
The applicant, Abdul Razak Safiullah is a Proprietary concern and is engaged in trading of Betel nut, under the name and style “Nizam Pakku” and the said brand name is owned and registered in favour of the Applicant. “Pakku” is a tamil word for “betel nut”. The said “Nizam Pakku” is manufactured by M/s Azam Laminators Pvt. Ltd. who sells the “Nizam Pakku” exclusively to the Applicant, which is marketed by them through Dealers and Distributors network.
Dried betel nut is procured and broken into pieces of smaller sizes, pulverized and then gently heated with Vanaspati, so as to ensure that vanaspati is spread evenly on the surface of the betel nuts; Sugar, glucose syrup, menthol and spices, viz., cardamom and cloves are also added; the use of glucose syrup and sugar which contains moisture can form fungus and hence a meager quantity of saccharin to the extent of 1000 Parts per million is added purely for preservation purposes; the resultant product is packed in small pouches under the name and style of Nizam Pakku.
The issue raised in this case was whether the ‘Nizam Pakku’ bought and sold by the Applicant, the manufacturing process of which has been explained by them, is classifiable under Chapter heading 0802 8030 of the Customs Tariff and hence attract 2.5 % CGST as per Sl.No.28 of Schedule I of Notification 1/2017 Central Taxes (Rate) Dated June 28, 2017 and equal rate of SGST.
The Authority consisting of Kurinjee Selvan and B. Senthilvelavan ruled that “Nizam Pakku” traded by the applicant merits classification under Chapter 0802 80 90 of the Customs Tariff and attracts 6 % CGST as per SI.No. 15 of Schedule II under Notification 1/2017-Central Tax (Rate) dated June 28, 2017 and 6% SGST under Notification No. II(2)/CTR/532(d-4)/2017 vide ). G.O.(Ms) No: 62 dated June 29, 2017 as amended.
Subscribe Taxscan Premium to view the Judgment
