Raula Gundi Is A Chewing Tobacco Without Lime Tube, Attracts 28% GST: AAR

The Orissa Authority for Advance Ruling (AAR) has held that "Raula Gundi," which is "chewing tobacco without lime tubes," attracts 28% GST with a 160% Compensation Cess.

The two members of the bench, G.K. Pati and P.K. Mohanty have observed that "Raula Gundi," i.e., chewable gundi, is "chewing tobacco," the principal or predominant ingredient of which is tobacco.

The applicant is in the business of manufacturing "Raula Gundi" (Chewable Gundi, its final product) and supplying it to various betel shops, grocery shops, tea shops, etc. under the cover of GST invoices.

The applicant stated that for the preparation of "Raula Gundi," he purchases different raw materials like tobacco dust, bhaja dhania, madhuri, mala zira, mustard oil, epoil, lime, etc.

The applicant sought an advance ruling in respect of the HSN Code of "Raula Gundi."

The Jurisdictional Deputy Commissioner submitted that the product "Raula Gundi" is classifiable under Tariff Heading 24039910 considering the predominant ingredient, i.e., tobacco, involved in the making of the chewable gundi (Raula Gundi). The JDC tax rate on "Raula Gundi" chewing tobacco (without lime tube) is 28%, and the Cess rate is 160%.

The AAR noted that the value for the purpose of GST computation will be the transaction value plus basic excise duty, national calamity contingent duty (NCCD), and any other amount as prescribed in Section 15 of the GST Act, 2017.

The AAR held that the applicable rate of GST on the product is 28%. The product also appears at Sl. No.26 of the notification dated June 28, 2017, issued under the CGST Act, 2017, under which a compensation cess of 160% is leviable on it.

Applicant's Name: Das & Sons

Date: 22.11.2022

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