Cooking Cream Attracts 18% GST: AAAR

The appellant is in the business of distributing various dairy and non-dairy products. The goods, namely "Cooking Cream", sold by the appellant under the name 'Cooking Delite", are proprietary foods consisting of water, edible vegetable fat (hydrogenated palm kernel oil), milk solids, sugar, and premixes of emulsifiers and stabilisers. It is ideal for use in truffles, soups, sauces, gravies, and all types of cuisines.

The appellant has sought an advance ruling on the issue of whether the product 'cooking cream' is classifiable under chapter heading 1517, attracting GST at the rate of 5%.

The Authority of Advance Ruling (AAR) has ruled that the "Cooking Cream", which is a non-diary cooking cream, does not merit classification under heading 1517 of the First Schedule to the Customs Tariff Act, 1975. Rather, it is classifiable under chapter heading 2106 of the schedule to the Customs Tariff Act, 1975 and chargeable to 18% GST.

The appellant contended that since "cooking cream" contains 26% edible oil along with some other ingredients, it forms a mixture/preparation of vegetable oil and that it is classifiable under chapter heading 1517 as "edible mixtures or preparations of animal or vegetable fats or oils or fractions of different fats or oils of this chapter, other than edible fats or oils or their fractions of heading 1516". Hence, the appellant contended that this product was chargeable with 5% GST.

The appellant has urged that the cooking cream be prepared by mixing various ingredients (sugar, milk solids, and various premixes) in edible vegetable fat, with vegetable fat serving as the main constituent and base. It is an emulsion of vegetable fat in water to which other ingredients such as sugar, milk solids, and flavours are added to provide the right taste. In addition to these, it contains stabilisers, thickeners, and emulsifiers. Thus, the processed oil (hydrogenated palm kernel oil) has been subjected to processes such as emulsification, which has caused a change in its character and quality. Accordingly, it is excluded from the heading 1516.

The AAAR, while upholding the AAR's ruling, observed that import data of India with regard to the import of "non-dairy whipping/topping cream at various Indian ports was checked on various websites and, as per this import data, non-dairy topping/whipping cream is being imported by classifying under chapter sub-heading 21069099.

Appellant's Name: Khera Trading Company

Citation: HAR/HAAR/R/2018-19/09

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