Page 137 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] IN RE : SRI BHAGYALAKSHMI TRADING CORPORATION 383
tion needs to be answered - “whether the parched/puffed gram sold by the ap-
plicant is exempt from tax”.
6.2 As per the applicant, the “Hurigadale” or “Putani” also called as
“Fried Gram” albeit misnomer is made out of the drying and puffing process
applied on Bengal Gram seeds. It is not in question that dry Bengal gram which
is also called Gram is covered under the HS Code 0713 - Dried Leguminous Veg-
etables, whether or not split.
6.3 Further the applicant states that the process of manufacture of
“Hurigadale” or “Putani” does not use salt or oil and is only application of dry
heat. It is also seen that by the application of dry heat, the gram gets parched or
dehydrated first and then puffs. Hence the commodity in question is “puffed
gram” which is commercially called as “Fried Gram” or in Kannada as
“Hurigadale” or “Putani”.
6.4 Regarding the contention of the applicant that the commodity is li-
able to be exempted as it is unbranded as per Circular No. 113/32/2019-GST,
dated 11-10-2019, the contents of the Circular is reproduced as under :
“Representations have been received seeking clarification in respect of ap-
plicable GST rates on the following items :
(i) Classification of leguminous vegetables such as grams when
subjected to mild heat treatment
…….
2. The issue wise clarifications are discussed below :
3. Classification of leguminous vegetables when subject to mild heat
treatment (parching) :
3.1 Doubts have been raised whether mild heat treatment of leguminous
vegetables (such as gram) would lead to change in classification.
3.2 Dried leguminous vegetables are classified under HS Code 0713. As
per the explanatory memorandum to the HS 2017, the Heading 0713 covers
leguminous vegetables of Heading 0708 which have been dried, and
shelled, of a kind used for human or animal consumption (e.g., peas, chick-
peas etc.). They may have undergone moderate heat treatment designed
mainly to ensure better preservation by inactivating the enzymes (the pe-
roxidases in particular) and eliminating part of the moisture.
3.3 Thus, it is clarified that such leguminous vegetables which are subjected to
mere heat treatment for removing moisture, or for softening and puffing or remov-
ing the skin, and not subjecting to any other processing or addition of any other in-
gredients such as salt and oil, would be classified under HS Code 0713. Such goods
if branded and packed in a unit container would attract GST at the rate of 5% [S.
No. 25 of notification No. 1/2017-Central Tax (Rate), dated 28-6-2017]. In all oth-
er cases such goods would be exempted from GST [S. No. 45 of Notification No.
2/2017-Central Tax (Rate), dated 28-6-2017].
3.4 However, if the above dried leguminous vegetable is mixed with other
ingredients (such as oil, salt etc.) or sold as namkeens then the same would
be classified under sub-heading 2106 90 as namkeens, bhujia, chabena and
similar edible preparations and attract applicable GST rate.”
6.5 It is clear from the above that the clarificatory circular states very
clearly that leguminous vegetables which are subjected to mere heat treatment
for removing moisture, or for softening and puffing or removing the skin, and
not subjecting to any other processing or addition of any other ingredients such
as salt and oil, would be classified under HS Code 0713. It is pertinent to note
GST LAW TIMES  21st May 2020  137