The Rajasthan Authority for Advance Ruling ( AAR ) ruled that 18 % Goods and Service Tax ( GST ) is Payable on “Milk food for babies” and “Milk for babies”. It was found that the Principle/dominant item of the applicant is the manufacturing of infant milk formula containing cereals, protein supplement etc. which is a substitute for mother’s milk for infants. Therefore, it is more appropriate to classify the manufactured product by the applicant under HSN 19011090.
M/S Bebymil International Private Limited, the applicant is engaged in the business of manufacturing and trading infant milk formula, infant cereals, protein supplements for children and adults, dairy whitener, whole milk powder, skimmed milk powder, fat-filled powder etc. The principal/ dominant item of the applicant is manufactured in the name of “infant milk formula” which is being used as a substitute for mother’s milk for the infants.
The company deals with a wide range of infant nutrition products, such as Momylac infant formulas ( Momylac 1, 2, 3, Premium variants, LBW, L&S Free ), infant cereals ( Shishulac Rice, Wheat Apple, Wheat Apple Cherry, etc ), and protein supplements for children ( Bebymil Junior Chocolate, Vanilla ) and lactating women ( Mommypro Chocolate, Vanilla ).
The applicant sought clarification on the applicable GST rate for their products, particularly “Milk food for babies” and “Milk for babies” marketed under the brand name “Momylac.” While the applicant was charging GST at the rate of 18% (9% CGST & 9% SGST/18% IGST) under HSN 19011090, competitors were charging lower rates under different HSN codes, creating confusion.
Upon the examination of the manufacturing process of the product manufactured by the applicant, it was evident that under Chapter 19 it is described that the milk product is one of the constituents of the final product whereas Chapter 4 deals with the milk product only.
The AAR found that the Principle/dominant item of the applicant is manufacturing of infant milk formula containing cereals, protein supplement etc. which is a substitute to mother’s milk for the infants. Therefore, it is more appropriate to classify the manufactured product by the applicant under HSN 19011090. Since, it is established that the final product manufactured by the applicant is classifiable under 19011090, the rate of GST payable by them in term of Notification No.01/2017 (Central Rate) dated 28.06.2017 is 18% GST (9% CGST & 9% SGST/ 18% IGST) .
The AAR comprising Mahipal Singh, Member ( Central Tax ) and Mahesh Kumar Gowla, Member (State Tax) ruled that the GST rate payable by the applicant for the supply of “Milk food for babies” and “Milk for babies” under the brand name “Momylac” is indeed 18% (9% CGST & 9% SGST/18% IGST) under HSN 19011090.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
