Supply of Mixture and Dough of Wheat Flour, Sugar and Water, cut into specific shape, which is dried and hardened by heating attracts 28% GST: AAR [Read Order]

The West Bengal Authority of Advance Ruling ( AAR ) in an application filed by Ambo Agritec Pvt Ltd held that supply of mixture and dough of wheat flour, sugar and water, cut into a specific shape, which is dried and hardened by heating is classifiable under tariff item 1901 20 00 which will attract 28% GST.

The applicant is a manufacturer of vanaspati, refined oil and biscuits along with non-edible intermediary product for confectionery prepared from a dough of wheat flour, sugar, food-grade sodium bicarbonate and water. The issue before the present authority is the determination of the appropriate classification of the intermediary product.

The applicant contended that the non-edible intermediary product is sold in non-branded packs to confectionery manufacturers, who processes it further by baking or frying and adding necessary condiments to come out with an edible preparation. It is submitted that the correct classification of the product is ‘pellets’ under HSN ‘1103 based on industry parlance. The tariff item 1103 20 00 under the First Schedule of the Customs Tariff Act, 1975 (hereinafter the Tariff Act) is relevant. The pellets refer to a small, rounded, compressed mass of a substance.

However, mixes and dough that are used for making bakers’ ware under HSN 1905 are classified under tariff item 1901 20 00. The Applicant argues that although its product can be placed in the category of mixes and dough, the final edible preparation is not limited to bakers’ ware. lt can be baked into biscuits or fried into namkeen.

The Revenue submits that HSN 1103 classifies the goods that bear registered brand names. As the Applicant is not supplying its Kaju-shaped products under any brand name, it is not classifiable under HSN 1103.

The Bench constituting of members Ms Susmita Bhattacharya and Ms Parthasarathi Dey held that supply of mixture and dough of wheat flour, sugar and water, cut into a specific shape, which is dried and hardened by heating is classifiable under tariff item 1901 20 00.

The applicant is supplying mixes and dough for preparation of biscuits and other bakers’ wares, whether or not the preparation of the final edible item involves further baking or frying. lt is, therefore, classifiable under tariff item 1901 20 00.