Roasted/ salted cashew nuts & groundnuts liable for GST at the rate of 12%

Brief Facts:

The applicant is engaged in the business as a supplier of Jackfruit Chips without brand name. The applicant purchases Jackfruit Chips from other registered persons making Jackfruit Chips. They levy tax @ 5% under HSN Code 1903 and accordingly the applicant also classified it under the same HSN Code and levied tax @ 5%. The applicant also intends to engage in the supply of salted as well as masala chips made from Tapioca and Potato, roasted/ roasted and salted/ salted preparations made out of groundnuts, cashewnuts and other seeds. The applicant sought ruling on appropriate classification and GST rates for the above products.

Observations of AAR:

• The term ‘NAMKEEN’ is not defined under the CGST Act. So, Common Parlance Test has to be applied. In common/ commercial parlance, NAMKEEN means SAVOURY SNACK that is ready to eat and is a food product prepared by applying salt, masala and the like. The Authority referred dictionary meaning of ‘NAMKEEN’ which describes it as ‘Salty or Savoury Food’.
• In Pepsico India Holdings Pvt. Ltd. vs. Commissioner of C.E.& Service Tax, the Hon’ble CESTAT, New Delhi held that salted food preparations are “namkeen”.
• In Para 3.1.1 of Chapter 3 of Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, it is stated that banana chips and similar fried products such as Chiwda, Bhujia, Dalmoth, Kadubale, Kharaboondi, Spiced and fried dals, sold by any name are traditional foods i.e. Snacks of Savouries (Fried Products).
• Chapter 20 of Customs Tariff specifically covers ‘Preparations of vegetables, fruits, nuts or other parts of plants. As per Chapter Note 1(a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapter 7, 8 or 11. Therefore, all the vegetable, fruit or nut products or preparations made other than by the processes specified in Chapters 7, 8 or 11 are included in the Chapter 20.
• The processes specified in Chapters 7, 8 or 11 mainly include freezing, steaming, boiling, drying, provisionally preserving and milling. Therefore, any vegetable, fruit, nut or edible parts of plants which is prepared or preserved by any other process than these are liable to be classified under Chapter-20. Chapter Heading 2008 of the Customs Tariff covers all roasted and fried vegetable products. When according to Chapter Notes and description of tariff items, the products are classifiable under specific headings of Chapter 20, they cannot be classified under Heading 2106 as “Food preparations not elsewhere specified or included”. Accordingly, Jackfruit Chips, Tapioca Chips and Potato Chips (salted or otherwise) are classifiable under Tariff Heading 2008.19.40 of the Customs Tariff Act, 1975.
• Regarding classification of roasted/ salted cashew nuts, groundnuts and other nuts, there are specific headings under Chapter 20 that covers the products. Accordingly, roasted/ salted/ roasted and salted cashew nuts were classifiable under Tariff Heading 2008.19.10, and roasted/ salted/ roasted and salted groundnuts and other nuts are classifiable under Customs Tariff Heading 2008 19 20 of the Customs Tariff Act, 1975.

Questions before Authority: