28% GST and 160% Cess applicable on Supply of Supari, Lime and Tobacco: AAR [Read Order]

28% GST and 160% Cess applicable on Supply of Supari, Lime and Tobacco: AAR [Read Order]

GST - Cess - Supply of Supari - Lime - Tobacco - AAR - Taxscan

The Authority for Advance Rulings (AAR), Gujarat has held that the supply of Grated Supari, Lime, and Tobacco by putting them together in a transparent plastic pouch for the sake of easy carry by the customer would attract 28% GST along with 160% cess.

Before the authority, the applicant contended that all the items will be supplied in a single pouch, will have a separate price,s and will be shown in the invoice as a separate bill of the item, and at no stage will a single price be charged from the customers. He has also stated that the plastic pouch will be used to merely facilitate the customer for easy carry of the products and that each of these items can be supplied separately and is not dependent on each other, so, they cannot be classified as composite supply.

The authority found that the combination of the 3 items discussed above i.e. Grated supari, slaked lime, and chewing tobacco shall be considered as a ‘mixed supply’ (as asked by the applicant). For this purpose, we feel it necessary to go through the definitions of both ‘composite supply’ and ‘mixed supply’ as defined under Section 2 of the CGST Act, 2017 in order to find out whether the above would be covered under the definitions of ‘composite supply’ or ‘mixed supply’.

“The very purpose of consuming this combination is that they have both stimulant and relaxation effects but regular consumption of the same leads to addiction. It is believed to produce a sense of euphoria in the body which is akin to that of smoking. It is also believed to produce a sense of well being, warm sensations in the body, sweating, salivation, palpitation and heightened alertness, tolerance to hunger and increased capacity and stamina to work. In this context, we would like to refer to an item known in common parlance as ‘gutkha’, which is a combination of the above 3 products,” the authority said.

Referring to section 7(a) of the Act, the authority held that “a composite supply comprising of two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. Therefore, in the instant case, since chewing tobacco is the principal supply in the composite supply of goods as discussed earlier, the said composite supply of goods would be treated as a supply of chewing tobacco falling under Tariff Item 24039910 of the First Schedule to the Customs Tariff Act, 1975 (1 of 1975).”

Subscribe Taxscan AdFree to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in

Related Stories

Related Stories