📢𝐇𝐂: 𝐈𝐧𝐭𝐞𝐫𝐩𝐫𝐞𝐭𝐬 '𝐚𝐬 𝐢𝐬 𝐰𝐡𝐞𝐫𝐞 𝐢𝐬'; 𝐐𝐮𝐚𝐬𝐡𝐞𝐬 𝟏𝟖% 𝐆𝐒𝐓 𝐨𝐧 𝐮𝐧𝐟𝐫𝐢𝐞𝐝/𝐮𝐧𝐜𝐨𝐨𝐤𝐞𝐝 𝐩𝐞𝐥𝐥𝐞𝐭𝐬 𝐦𝐚𝐧𝐮𝐟𝐚𝐜𝐭𝐮𝐫𝐞𝐝

Facts:
▪️The Assessee, J.K. Papad Industries, challenged a show cause notice (SCN) issued under Section 74 of the CGST ▪️Act that sought to levy 18% GST on their product, unfried/uncooked snack pellets (commonly known as fryums), by classifying it under HSN 19059030.
▪️The Assessee argued that the correct classification should be under HSN 19059040, which attracts a lower GST rate of 5% or no tax.
▪️The Assessee had claimed exemption from GST, and their returns had been filed at a Nil rate of GST.
▪️The Revenue authorities, however, relied on CBIC’s Circular No. 189/09/2023-GST to argue that fryums were taxable at 18%.

Court's Judgment:
▪️The Gujarat High Court quashed the SCN seeking to levy 18% GST.
▪️The Court held that the Assessee's claim for Nil GST should be regularized based on the "as is where is" basis, which was used to adjust the GST rate from 18% to 5% for such products following the 50th GST Council Meeting.
▪️The Court referred to a binding ruling by the Gujarat Appellate Authority of Advance Ruling (AAAR), which classified similar products under HSN 19059040.
▪️It was noted that the Revenue misinterpreted the term "as is" and should have accepted the Assessee's classification and returns without levying 18% GST.
▪️The Court directed the Revenue to regularize the Assessee's returns at the Nil rate