Infant milk formula attracts GST at 18% rules AAR

Mumbai, June 11, 2024

The GST-Authority for Advance Rulings (Rajasthan bench) has held that Bebymil was correctly levying and collecting Goods and Services Tax (GST) at 18% against its infant milk formula products.

These products, which had variations based on age, were sold under the brand name of Momylac. The manufacturer approached the AAR as some competitors were charging GST only at 5%.

The AAR held that Chapter 4 deals with milk products only. However, in the case of the applicant milk was one of the constituents of Momylac. The product also contained cereals, protein supplements etc – the ingredients varied based on the infant’s age. Thus, the manufacturer had correctly computed GST at a higher rate.

Tax experts emphasize that the classification norms need to become simpler. In the past the Gujarat AAR bench has held lassi to be exempt from GST, but flavoured milk was held taxable at 12%

The HSN (Harmonised System of Nomenclature) classification, which serves as the basis for GST categorization, adheres to an internationally accepted system developed by the World Customs Organization. In India, this system is extensive, comprising 21 sections, 99 chapters, 1,244 headings, and 5,224 sub-headings. Each section and chapter encompass broad categories of goods, while headings, and sub-headings provide intricate details.

[The Times of India]