2026-VIL-204-AAR
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SGST Advance Ruling Authority

GST – Karnataka AAR - Classification of Kulfi - Heading 0404 or Heading 2105 of Customs Tariff - The Applicant proposed to manufacture and retail kulfi, a product prepared by heating milk until it is reduced in volume, adding sugar, flavouring agents and dry fruits, and freezing the mixture - The Applicant contended that kulfi retains the essential character of a milk product due to the predominant use of milk and merits classification under Heading 0404 - Whether kulfi prepared from milk and sugar, with or without dry fruits, is classifiable under Heading 0404 as a product consisting of natural milk constituents or under Heading 2105 00 00 as ice cream and other edible ice - HELD - GST classification is aligned with the HSN, and the tariff item, sub-heading, heading and Chapter carry the same meaning as in the First Schedule to the Customs Tariff Act, 1975, read with the Rules for Interpretation. Heading 0404 covers products which are essentially natural milk constituents, retaining the basic character of milk with minimal or no processing, and the expression not elsewhere specified or included restricts it to products not classifiable under a more specific heading. Kulfi is not a mere milk derivative since the process of heating, concentration, addition of ingredients and freezing results in a new and distinct product with a different character, use and identity - Classification cannot be determined solely on the predominant ingredient, because otherwise ice cream and frozen desserts, which are largely milk-based, would fall under Chapter 04 and render Heading 2105 redundant. The identity, character and use of the finished product are of greater significance than the ingredients. Applying the common parlance test, kulfi is not purchased as a milk constituent but is known, sold and consumed as a ready-to-eat frozen dessert in the same manner as ice cream - The expression other edible ice in Heading 2105 is of wide import and covers frozen edible products of a similar nature. Under Rule 3(a) of the General Rules for Interpretation, the heading providing the more specific description is to be preferred, and a specific entry prevails over a general entry - Kulfi is classifiable under Tariff Heading 2105 00 00 and not under Heading 0404 – Ordered accordingly
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