Mumbai: GST The Authority for Advance Rulings (AAR-Gujarat) has held that Lassi, fermented Milk Exempt from products, goods and services do (GST).
NS R Judgment in a recent case where a Valsad-based manufacturer and supplier – Total dairy and Agrotech – had approached him on the applicable GST rate.
On the other hand, due to complexities in classification, AAR benches have held in the past that flavored milk is not exempt from GST.
The Valsad-based dairy sells the lassi under the brand name ‘Allen’ in four flavors – plain (without sugar or salt), salty with cumin, strawberry sweetened with sugar, and blueberry sweetened with sugar.
The AAR Bench observed that the main ingredients of the lassi which were being made and sold were curd, water and spices.
The ingredients featured on the bottle were pasteurized toned milk, spices, mint, green pepper, ginger, salt, active culture, additional nature-like flavorings and stabilizer. The bottle demonstrated that it was a ‘dairy based fermented drink’.
Fortunately for the producer and the end consumer, CurdLassi and buttermilk fall under a specific classification (HSN 040390) and are exempt from GST. Tax experts point out that manufacturers and suppliers of flavored milk have not been as fortunate.
The Gujarat AAR itself, in the case of Amul, which manufactured and supplied flavored milk (made from milk mixed with sugar and permitted flavourings), had held that a GST rate of 12% would be applicable (HSN 22029930).
“In essence, both lassi and flavored milk are dairy-based drinks, but classification codes treat them differently,” said a tax expert.
NS R Judgment in a recent case where a Valsad-based manufacturer and supplier – Total dairy and Agrotech – had approached him on the applicable GST rate.
On the other hand, due to complexities in classification, AAR benches have held in the past that flavored milk is not exempt from GST.
The Valsad-based dairy sells the lassi under the brand name ‘Allen’ in four flavors – plain (without sugar or salt), salty with cumin, strawberry sweetened with sugar, and blueberry sweetened with sugar.
The AAR Bench observed that the main ingredients of the lassi which were being made and sold were curd, water and spices.
The ingredients featured on the bottle were pasteurized toned milk, spices, mint, green pepper, ginger, salt, active culture, additional nature-like flavorings and stabilizer. The bottle demonstrated that it was a ‘dairy based fermented drink’.
Fortunately for the producer and the end consumer, CurdLassi and buttermilk fall under a specific classification (HSN 040390) and are exempt from GST. Tax experts point out that manufacturers and suppliers of flavored milk have not been as fortunate.
The Gujarat AAR itself, in the case of Amul, which manufactured and supplied flavored milk (made from milk mixed with sugar and permitted flavourings), had held that a GST rate of 12% would be applicable (HSN 22029930).
“In essence, both lassi and flavored milk are dairy-based drinks, but classification codes treat them differently,” said a tax expert.
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