Supply of Masala Paan with Principal Supply as Betel Leaf Not Composite Supply: AAR Clarifies

The applicant company, Sharad Sadashiv Patil, is planning to engage in the manufacturing and supply of Masala Paan or Meetha Paan across Indian states and even outside India. The applicant said that the reason behind selecting this business idea is that Masala Paan is a favourite after-meal snack that has multiple uses, such as a mouth freshener and a digestive enhancer.

The applicant company filed an application under section 97 of the CGST Act before the Maharashtra Authority for Advance Ruling (AAR) seeking an advance ruling for the following questions:

“1. Classification of Goods/ Services (Please read with connecting question no.2).

2. Whether Supply of ‘Masala Pan’ is a Composite Supply with Principal Supply as Betel Leaf and other components as ancillary supply?”

As per the Maharashtra AAR, Masala Paan or Meetha Paan falls under Chapter Heading 2106 9099 and attracts GST at the rate of 18% as per entry No. 23 of Schedule III of Notification No. 1/2017 CT (R) Dated 28.06.2017.

The authority also clarified that the supply of Masala Paan with Principal Supply as Betel Leaf and other components as ancillary supply is not a composite supply.