The GST Authority for Advance Rulings (AAR-Gujarat) has held that Lasi the fermented milk product, is exempt from items and companies tax (GST).

The AAR made the ruling in a latest case the place a Valsad-based producer and provider — Sampoorna Dairy and Agrotech — had approached it on the relevant GST fee.

On the flip aspect, owing to the complexities in classification, AAR benches have held prior to now that flavoured milk is not exempt from GST.

The Valsad-based dairy bought lassi below the model identify ‘Elan’ in 4 flavours — plain (with no sugar or salt added), salted with cumin, strawberry sweetened with sugar, and blueberry sweetened with sugar.

The AAR bench famous that the principle components of the lassi that was being manufactured and bought had been curd, water and spices.

The components displayed on the bottle had been pasteurized toned milk, spices, pudina, inexperienced chilli, ginger, salts, energetic tradition, added nature-an identical flavour and stabiliser. The bottle displayed that it was a ‘dairy-based fermented drink’.

Fortunately for the producer, and the tip client, curds, lassi and buttermilk come below a selected classification (HSN 040390) and are exempt from GST. Tax consultants level out that producers and suppliers of flavoured milk have not been as fortunate.

The Gujarat AAR itself, within the case of Amul, which manufactured and provided flavoured milk (made of milk added with sugar and permitted flavours) had held {that a} GST fee of 12% would apply (HSN 22029930).

“In essence, both lassi and flavoured milk are dairy-based drinks, but the classification codes treat them differently,” stated a tax skilled.

Source : The Times of India August 24,2021