Order Date – 13 July 2023

Key Pointers – 

• The Applicant, M/ s. Sirimiri Nutrition Food Products Private Limited, is engaged in manufacture of nutrition food products. They intend to manufacture new variety of chikkies i.e. Sesame Chikkies, Chocolate Peanut Chikkies, Amaranth Chikkies, Crushed Peanut Chikkies, Spirulina Chikkies, Dry Fruit Chikkies.
• The issue involved here is whether Chikkies are to be taxed at 5% GST as per Notification No.41 /2017-Central Tax (Rate) dated 14.11.2017?
• The AAR observed that the important and common ingredient in all of these products is jaggery, which is an unrefined natural sugar that is produced without adding any chemicals.  Jaggety, like sugar, is made from sugarcane without separating the molasses. Thus, jaggery broadly can be termed as a form of sugar.
• Chikkis, which are jiggery based preparations and are meant for direct consumption as snacks, are squarely covered under term Sugar Confectioneries. Thus all the sugar confectionery that do not contain cocoa are covered under heading 1704.
• In the instant case it is observed that the impugned products except “Chocolate Peanut Chikkies” do not contain cocoa and thus the products ‘Sesame Chikkies, Amaranth Chikkies, Crushed Peanut Chickies, Spirulina Chikkies and Dry Fruit Chickies” are squarely covered under Sugar Confectionery and thus fall under heading 1704.
• The products chikkies  that  are covered under chapter heading 1704 are exigible to GST @5%, in terms of entry number 92 to Schedule-I to the Notification No. 1 /20 17-Central Tax (Rate) dated 18.06.2017, as amended by the Notification 4 l / 20 17-Central Tax (Rate} dated 14.11.2017.
• The product ‘Chocolate Peanut Chickies" contain cocoa powder and thus the said product is not covered under Chapter 17. Cocoa and Cocoa Preparations are covered under Chapter 18; Thus the product ‘Chocolate Peanut Chikkies” that contains cocoa powder admittedly is covered under the chapter heading 1806 90 20.
• Thus the ‘Chocolate Peanut Chickies" are exigible to GST @ 18%, in terms of entry number 12C of the Schedule — III to the Notification No. 1/ 20 17-Central Tax (Rate) dated 18.06.2017, as amended  by   the   Notification 41/ 2017-Central Tax (Rate} dated 14.11.2017.