Applicant: M/s. Agro Tech Foods Limited
Application under Section 97 of the CGST Act, 2017 and the Telangana GST Act, 2017
Purpose: Seeking Advance Ruling
Order passed on: 29.03.2022
The Applicant herein is engaged in the business of selling readymade popcorn and believes that the product is falling under heading 1904 which covers Prepared foods obtained by swelling or roasting of cereals or cereal products.
The question in application was What would be the correct HSN classification and consequently rate of GST applicable on ‘Ready to Eat’ popcorn sold in retail packages?
Judgement: As per Serial No. 15 of Schedule III of Notification No. 01/2017, the tariff head “1904” is as follows:
“Prepared foods obtained by the swelling or roasting of cereals or cereal products (for eg. Corn flakes); cereals {Other than maize(corn)} in grain form or in the form of flakes or other worked grains (except flour, groats & meal), pre-cooked, or otherwise prepared, not elsewhere specified or included”.
Applying the facts of the case supplied by the applicant it is clear that the RTE popcorn falls under tariff heading ‘1904’ as it is prepared by swelling the corn by a process of heating the same.
Thus, when a specific entry is available for enumerating the commodity ‘RTE popcorn’ to relegate it to the orphanage of the residuary entry will be against the principle of classification as held by Hon’ble Apex Court in the above precedents. Hence, RTE popcorn is classifiable under tariff head ‘1904’ and 18% GST will be applicable.
The complete order can be downloaded from this link: https://gstcouncil.gov.in/ms-agro-tech-foods-limited