The Orissa Authority for Advance Ruling ( AAR ) has held that “Raula Gundi” is chewing tobacco without lime tubes and attracts 28% GST.
M/s Das & Sons, the Applicantengaged in manufacturing of “Raula Gundi” (Chewable Gundi- its final product) & supplying the same to various Betel shops, Grocery shops, Tea shops etc under the cover of GST invoices.
The Applicant contended that it was intended to prepare a chewable Gundi which is made by mixing different ingredients like Tobacco dust, Bhaja dhania, Madhuri, Mala zira, Mustard oil, Epoil, and Lime. The said Gundi is locally known as “Raula Gundi”.
The applicant has also informed us that for the manufacture of 1 KG “Raula Gundi”, Tobacco 500gm, Dhania 300gm, Pan madhuri 50gm, Mala zira 50gm, Epoil 1ml, Lime 50gm, Mustard oil 75ml, Cinnamon 5gm & Clove 2.5gm are used and was the view that the HSN Code of the product ( Raula Gundi) is 24039920 and the applicable tax rate is 14% CGST, 14% SGST and GST Cess is 72%.
The two members of the bench, G.K. Pati and P.K. Mohanty have observed that in the process of manufacturing the product, the raw materials used by the Applicant undergo a set of processes and emerge as ‘Chewable Tobacco Gundi’ which ismarketable/consumable.
The product prepared and sold by the Applicant is a “Manufactured Tobacco product for chewing” and the classification of the product is under HSN Code 24039910 which specifies ‘Chewing Tobacco’ under the head “2403-Other manufactured tobacco”.
The AAR noted that the value for GST computation will be the transaction value plus basic excise duty, National Calamity Contingent Duty (NCCD), and any other amount as prescribed in Section 15 of the GST Act, 2017.
The authority held that 28 % GST is applicable on the product and the product also appears at Sl. No.26 of the notification dated June 28, 2017, issued under the CGST Act, 2017, under which a compensation cess of 160% is leviable on it.
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