Fortified Rice Kernels Classified Under Chapter 19, Attract 18% GST

The Appellate Authority for Advance Ruling (AAAR) in Chhattisgarh, in the case of M/s Brindavan Agrotech (P.) Ltd., ruled that Fortified Rice Kernels (FRK) are classified under Chapter 19 of the Customs Tariff Act, 1975 under the subheading 19049000 and attract an 18% GST rate.

The key findings of the case included:

1. Manufacturing Process: The milling process alone places rice products under Chapter 11. However, the fortified rice undergoes a more extensive process involving blending rice flour with a vitamin-mineral premix, introducing binders, and using extrusion machines. This exceeds the limits of Chapter 11.
2. Classification: The authority observed that FRK is not a traditional rice product, but rather one that has undergone additional mechanical and chemical processes. Therefore, FRK is classified under Chapter 19, heading 1904, which covers food preparations beyond milling, and thus attracts an 18% GST rate (9% CGST + 9% SGST or 18% IGST).
3. Government Notifications: The GST Council in its 45th meeting recommended lowering the GST rate to 5% on FRK supplied for government schemes like ICDS. This was affirmed by Notification No. 11/2021-Central Tax (Rate), which amended the previous rate from October 1, 2021.

In conclusion, FRK is classified under Chapter 19 and attracts an 18% GST, unless supplied for specific government schemes, where a lower rate of 5% applies.

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