Tutti fruity to be classified under HSN 20060000 and taxed @ 12% GST : AAR

Tutti-frutti is manufactured out of fruits, especially raw papaya, which is first stored in brine solution after peeling and then cut into cubes, later washed and boiled in water and cooked with sugar, colour, preservative, citric acid. Lastly, the product is dried and packed for sale. There is a process of cooking by boiling in water and sugar is also added.

Chapter 20 of CTH relates to preparations of vegetables, fruits, nuts or other parts of plants and Chapter Note no. 1 states that this chapter does not cover vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11; The tariff item 20.06 deals with vegetables, fruits, nuts, fruit-peel and other parts of plants which are preserved by sugar (drained, glace or crystallised). The item in question is no doubt a fruit.

In the instant case the process of preparation of the product tutti-frutti by the applicant tallies with the process referred to in the explanation supra. In view of the above, the product tutti-frutti is rightly classifiable under CTH 20060000.

The Authority of Advance Ruling Karnataka in matter of Wonderfrutz Products LLP

The Extract of Order is given below for reference:

4. FINDINGS & DISCUSSION:

4.1 The submissions of the applicant have been examined as it is seen that the product tutti-frutti is manufactured out of fruits, especially raw papaya, which is first stored in brine solution after peeling and then cut into cubes, later washed and boiled in water and cooked with sugar, colour, preservative, citric acid. Lastly, the product is dried and packed for sale. There is a process of cooking by boiling in water and sugar is also added.

4.2 The notification No.01/2017-Central Tax (Rate) dated 28.06.2017 provides the following clauses, with regard to classification of goods under GST, at explanation to the said Notification.-

(iii) Tariff item, sub-heading heading and Chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

In view of the above, the Customs Tariff Act, 1975 including the Section & Chapter Notes, General Explanatory Notes shall apply to the classification of the goods under GST also.

4.3 Chapter 8 of the Customs Tariff Act of India relates to Edible fruits and nuts; peels of citrus fruit or melons. Tariff item 0811 deals with fruits and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not containing added sugar or other sweetening matter.

From the above it becomes evident that the main requirement for a commodity to be classified under the tariff heading 08.11 must be

1. They are fruits and nuts,-

a. uncooked or cooked by steaming or boiling in water

b. frozen

c. Whether or not containing added sugar or other sweetening matter.

4.3.1 In this regard reference is made to the explanatory notes to the Hormonised Commodity Description and Coding System, with respect to the CTH 0811, which is appended below:

08.11- Fruit and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not containing added sugar or other sweetening matter.

081 1.10 Strawberies

0811.20 Raspberries, blackberries, mulberries, loganberries, black, white or red currants and gooseberries

0811.90 Other

This heading applies to frozen fruit and nuts which, when fresh or chilled, are classified in the preceeding headings of this Chapter (As regards the meanings of the expressions chilled and frozen, see the General Explanatory Note to this Chapter)

Fruit and nuts which have been cooked by steaming or boiling in water before freezing remain classified in this heading. Frozen fruit and nuts cooked by other methods before freezing are excluded ( Chapter 20)

Frozen fruit and nuts to which sugar or other sweetening matter has been added are also covered by this heading, the sugar having the effect of inhibiting oxidation and thus preventing the change of colour which would otherwise occur, generally on thawing out. The products of this heading may also contain added salt.

4.3.2 The explanatory notes also provide that the heading 08.11 applies to fruits which may have been cooked by boiling and are then frozen. In the instant case the flow chart provided by the applicant, though shows boiling of the fruit, does not indicate the freezing of the fruit consequent to processing. Therefore, we are of the opinion that the product as presented by the applicant does not qualify classification under Tariff Heading 08.11

4.4 The other competing entry is CTH 20.06.00.00. Chapter 20 of CTH relates to preparations of vegetables, fruits, nuts or other parts of plants and Chapter Note no. 1 states that this chapter does not cover vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11; The tariff item 20.06 deals with vegetables, fruits, nuts, fruit-peel and other parts of plants which are preserved by sugar (drained, glace or crystallised). The item in question is no doubt a fruit.

4.4.1 In this regard reference is made to the explanatory notes to the Hormonised Commodity Description and Coding System, with respect to the CTH 2006, which is appended below:

20.06 Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glace or crystallized).

The products of this heading are prepared first by treating the vegetables, fruit, nuts, fruit-peel or other parts of plants with boiling water (which softens the material and facilitates penetration of sugar) and then by repeated heating to boiling point and storage in syrups of progressively increasing sugar concentration until they are sufficiently impregnated with sugar to ensure their preservation.

The principal products preserved by sugar are whole fruit or nuts (cherries, apricots, pears, plums, chestnuts (marrons glaces), walnuts etc.), sections or pieces of fruit (oranges, lemons, pineapples, etc.), fruit-peel (citron, lemon, orange, melon etc.), other parts of plants (angelica, ginger, yams, sweet potatoes, etc.) and flowers (violets, mimosa, etc.)

Drained products are prepared by using a syrup (e.g. a mixture of invert sugar or glucose with a proportion of sucrose) which does not crystallize on exposure to the air. After impregnation the excess syrup is drained off leaving the product sticky to the touch.

Glace products are obtained by dipping the drained product in a sucrose syrup which dries as a thin, shiny coating.

Crystallised products are prepared by allowing the sucrose syrup to penetrate into the product so that, on drying, it forms crystals on the surface or throughout the product.

Those goods preserved by sugar and put up in syrup, whatever the packing, are excluded from this heading (heading 20.02, 20.03 or 20.05. in the case of vegetables, or heading 20.08, in the case of fruit, nuts, fruit-peel and other edible parts of plants e.g., marrons, glaces or ginger).

Dried fruits (e.g., dates and prunes) remain classified in Chapter 8 even if small quantities of sugar have been added, or if the exterior is covered with a deposit of dried natural sugar which may give the fruit an appearance somewhat similar to that of crystallized fruit of this heading.

4.5 In the instant case the process of preparation of the product tutti-frutti by the applicant tallies with the process referred to in the explanation supra. In view of the above, the product tutti-frutti is rightly classifiable under CTH 20060000.

5. In view of the foregoing, we rule as follows

RULING

The Tutti-frutti being the product of papaya is covered under Chapter / Heading / Sub-heading / Tariff item 20 06 00 00.