AAR’s GST Verdict on Infant Food

The Rajasthan Authority for Advance Ruling (AAR) has ruled that infant food products containing ingredients other than milk may be subject to an 18% goods and services tax (GST), differing from the 5% GST applied to milk products. This decision was made in response to an application from Jaipur-based Bebymil, seeking clarity on the GST rate for its products marketed under the trade name Momylac — milk food for infants and milk for infants.

The AAR highlighted that the primary product manufactured by Bebymil is infant milk formula, which includes cereals and protein supplements, serving as a substitute for mother’s milk. The GST rates for goods are determined based on their Harmonized System of Nomenclature (HSN) codes. In this case, the authority noted that the products fall under HSN 1901, encompassing items where milk is one of the ingredients, rather than HSN 0402, which specifically pertains to milk products.

As per the AAR, products falling under HSN 1901 are subject to an 18% GST rate, whereas those categorized under HSN 0402 are subject to a 5% GST. It’s important to understand that the composition of ingredients in any product significantly influences its classification and, consequently, the applicable GST rate.