Clarifications on Karnataka VAT with respect to rates applicable on certain products

PROCEEDINGS OF THE AUTHORITY FOR CLARIFICATION AND ADVANCE RULING UNDER SECTION 60 OF THE KARNATAKA VALUE ADDED TAX ACT, 2004 AND WITH RULES 164 TO 165 OF THE KARNATAKA VALUE ADDED TAX RULES, 2005

Present:  (l)M.D.Jain, Additional Commissioner of Commercial Taxes (Head Ouarter)-l, Bangalore and chairman:
(2) H. D. Arunkumar, Additional Commissioner of Commercial Taxes, (Policy & Law), Bangalore and Member.
(3) R. Jagadeesh Prasad, Additional Commissioner of Commercial Taxes, (GST), Bangalore and Member.

NAME AND ADDRESS OF THE APPLICANT

M/s. Sankeshwar Minerals Private Limited,
2nd Floor, Giriraja Annexe, Circuit House-Road,
HUBLI-580089.         :  TIN – 29320248156

JURISDICTIONAL ASSESSING AUTHORITY :.LVO-330, Hubli.

REPRESENTED BY: Sri. Mahesh, Accounts Officer.

ORDER NO.ALR.CLR.CR-09/12-13,  DATED: 03-12-2012

M/s Sankeshwara Minerals Pvt. Ltd. 2nd floor, Giriraj Annexe, Circuit House Road, Hubli- 580029 borne in the files of LVO-330, Hubli having TIN: 29320248156 (“the applicant” for short) has filed an application in Form VAT-540 dated: 08-05-2012 under section 60 of the KVAT Act 2003 (“Act” for short). The applicant is seeking the clarification on the rate of tax applicable on the following products namely, 1. Shenga Chatney 2. Putani Chatney 3. Agasi Chatney 4. Gurellu Chatney.

2)        The applicant’s authorised representative Sri. Mahesh, Accounts Officer appeared before this Authority on 19-10-2012 and was heard.

3)        Along with the application the applicant as filed the details of ingredients which are used for the manufacture of aforesaid products. The details are as under:-

1.         Shenga Chatney (Groundnut chatney powder)

Ingredients

a)   Roasted ground nut seeds

b)   Byadagi chilli

c)   Guntur chilli,

d)   Jeera (Cumini)

e)   Curry leaves

f)   Salt

g)   Garlic

h)  Sugar

 

2.         Putani Chatney (Fried Gram chatney powder)

Ingredients

a)         Fried Gram

b)        Roasted Ground nut seeds

c)         Byadagi chilli

d)        Guntur chilli.

e)         Jeera (Cumini)

f)         Curry leaves

g)         Salt

h)        Garlic

i)          Sugar

 

3.   Agasi Chatney (Linseed chatney powder) Ingredients

a)         Roasted Agasi powder

b)        Byadagi chilli

c)         Guntur chilli  ,

d)        Jeera (Cumini)

e)         Curryjeaves

f)         Salt

g)         Garlic

 

4.  Gurellu Chatney (Nigef seeds chatney powder) Ingredients

a)         Gurellu

b)        Byadagi chilli

c)         Guntur chilli

d)        Jeera (Cumini)

e)         Curry leaves

f)         Salt

g)         Garlic

4) The application is examined in the light of enclosures and documents produced and submissions made. From the verification of documents it is clear that the above mentioned products are made by mixing of dal, spices and other materials like chilli, curry leaves, salt, garlic etc. The issue is whether the applicant’s products are masala powders that are liable to lower rate of VAT or not.

5) Masala powder as is known in the market and by the consumers is a mixture of spices and other ingredients that is used in cooking of djshes. It is not eaten and consumed as it is. However the applicant’s products are “Chatney powders” are in a ceady to eat condition and are generally eaten along with Chapathis, Rotis, etc. Hence they are commercially different from Masala powders.

In view of the above discussion this Authority is hereby clarifies that the Applicant’s products 1. Shenga Chatney 2. Putani Chatney 3. Agasi Chatney 4. Gurellu Chatney are taxable under section 4(l)(b) of the KVAT Act 2001 and liable to tax a-rt:4% from 1.4.2011 to 31.7.2012 and 14.5% from 1.8.2012.