Comments
Shishir Sinha
Cut fruits in sealed container with or without preservatives or additives and sold under a brand name will attract 5 per cent GST, ruled Karnataka’s Authority for Appellate Ruling (KAAR) has said.
Bengaluru based Juzi Fruits is engaged in sale-purchase of fresh fruits – individually or mixtures of fruits in a bowl ready-to-eat. Some of the packaging contain just fresh fruit while some are mixed with dry fruits and nuts. It sought an advance ruling regarding HSN (Harmonised System of Nomenclature) code and GST rate for fruit bowl containing only cut fresh fruit (individual fruit or mixture of different fruits) and fruit bowl containing both fresh fruit and dry fruits and nuts.
It also wanted to know whether it will be eligible for input tax credit (ITC) for GST paid on plant and machinery and other services, if end product attracts nil GST.
HSN
The AAR noted that the company is using the registered trademark, ‘Juzi-Eat fruits, stay happy.’ Further, it said that HSN for cut fruits in a sealed bowl under a brand name will be 1106 and accordingly it will attract GST at the rate of 5 per cent.
With or without nuts
On supply of fresh fruit along with dry fruits or nuts, the AAR said that fresh fruits, dry fruits and nuts are supplied separately and being invoiced as separate line items. In this said case, the customer is having the choice of choosing the dry fruits or nuts. “So, the value of the fruit bowl is nothing but the sum of separate supplies of fresh fruits and dry fruits and nuts. Hence the tax rate applicable is that which are applicable to the fruits, dry fruits and nuts separately as they are separate supplies,” AAR said.
The Authority noted that the company does not give the customer the choice of choosing the dry fruits and nuts to be accompanied and sells the fresh fruits with dry fruits and nuts as a single package.
Since, the nature of dry fruits and nuts is not provided by the company, the tax rate applicable to the dry fruits and nuts would be the tax rate applicable to the entire package. This means the tax rate would be 5 per cent.
On the input tax credit issue, AAR said as the product in question is taxable, the company concerned would be eligible for ITC.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.