The Karnataka Authority of Advance Ruling (AAR) ruled that the Supply of sealed fruit bowls containing only cut fresh fruits without the addition of any preservatives or additives attracts 5% GST.
The applicant, Juzi Fruits Pvt. Ltd. is engaged in the process of buying. processing and selling of various varieties of cut fresh/dry fruits and nuts ready for human consumption under specific brand names both directly to customers and other vendors.
The applicant has sought an advance ruling in respect of appropriate HSN code applicable to supply of Fruit bowl containing only cut fresh fruits (individually or a mixture of different fruits) and Fruit bowl containing both cut fresh fruits and dry fruits and nuts, GST tax rate applicable for each of the classified goods. Eligibility to an input tax credit of GST paid on plant and machinery and expenses relating to the business in case the end product is classified as belonging to 0% tax rate under GST.
The two-member bench of Dr. M.P.Ravi Prasad and Mashood Ur Rehman Farooqui ruled that Supply of sealed fruit bowl containing only cut fresh fruits without the addition of any preservatives or additives which are sold under the brand name is covered under entry no.59 of Schedule I of Notification No. 1/2017 – Central Tax (Rate) dated 28.06.2017 Vide HSN 1106 and is liable to tax @ 2.5% under CGST Act and 2.5% under the SGST Act, 2017.
The AAR ruled that The Fruit bowl containing both cut fresh fruits and dry fruits and nuts is taxable at a rate applicable to the supply of dry fruits and nuts. The tax rate applicable on dry fruits and nuts cannot be provided as the exact nature of the dry fruit or nut is not provided. The applicant is eligible for an input tax credit on the tax paid on the inward supplies of inputs and input services involved in the supply which is taxable.
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