Mix Mukhwas and Roasted Til and Ajwain attract 5% GST: AAR [Read Order]

The Gujarat Authority of Advance Ruling (AAR) ruled that Mix Mukhwas and Roasted Til and Ajwain attract Goods and Services Tax (GST) at the rate of 5%.

The applicant deals in various types of seed mix, two of which are 'Mix mukhwas' and 'Roasted til & Ajwain’, which they claim is made up of mixed roasted and salted seeds, represented by Nitesh Jain, Krupen Patel, Jay Dalwadi, Dhrumin Patel and Harsh Shah.

The applicant stated that in both the products, there is dominating quantity of sesame seeds,

60% in Mix Mukhwas and 97%, Roasted Til & Ajwain. Further, in Mix Mukhwas, in addition to sesame seeds, dhanadal content is 27%, which when combined, totals to 87%.

It was also submitted that There is no element of pan masala, sugar or chocolate, preservatives or any other artificial flavouring substances used by them. These products are purchased by the customers who desire to consume sesame seeds normally as a seed mix. The applicant is currently selling both the products by classifying it under HSN 12074090.

The applicant sought an advanced ruling as to whether the Products 'Mix Mukhwas' and Roasted Til & Ajwain prepared and sold are covered by HSN code 12074090 and Whether the Products Mix Mukhwas and Roasted Til & Ajwain' prepared and sold are covered by entry no. 70 of Schedule I of Notification No. 1/2017-Central Tax (Rate) and taxed at the rate of 2.5% CGST and 2.5% SGST or IGST.

Personal hearing was granted wherein Nitesh Jain, Krupen Patel, Jay Dalwadi, Dhrumin Patel and Harsh Shah appeared on behalf of the applicant & reiterated the submission. It was stated that the products on which ruling is sought were new products.

The Authority noted that the primary contention of the applicant is that sesame seeds [Til] is the main seed constituent in both the products in respect of which ruling is sought; that sesamum seeds are classifiable under chapter 12 of CTA '75; that the other seeds in the product are classified under chapter 9, ibid; that heat treatment done in respect of the product is only for preservation and that the heating process does not convert it into any specific use; that they have chosen to treat them further by way of flavouring & use them in the said two products; that in terms of 3(b) of GRI, mixtures will be classified as per the dominating product which gives the essential character which in their case is sesame seeds; that they are of the opinion that both the products falls under 12074090 & is leviable to tax under 5% GST.

It was noted that, “The composition of both the products, in respect of which ruling is sought, clearly show that these products, mainly comprise of sesamum seeds i.e. 60% in respect of the first product and 97% in respect of the second product.”

It was further noted that, “The HSN explanatory notes to chapter 12 further states that the seeds covered by the heading may be whole, broken, crushed, husked or shelled; they may also have undergone heat treatment designed mainly to ensure better preservation for the purpose of de-bittering for inactivating anti factors or to facilitate their use; that such treatment is permitted only if it does not alter the character of the seeds & does not make them suitable for a specific use rather than for general use.”

It was thus found that, “the product is classifiable under chapter 12 of the Customs Tariff Heading, specifically CTH 12074090.”

The Authority Bench of Members Milind Kavatkar and Amit Kumar Mishra thus ruled that, “The products 'Mix Mukhwas' and 'Roasted Til & Ajwain' prepared and sold are covered by entry no. 70 of Schedule I of Notification No. 1/2017-Central Tax (Rate) and taxed at the rate of 2.5% CGST and 2.5% SGST or 5% IGST.”

To Read the full text of the Order CLICK HERE

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