Pranav B Prem

The Gujarat Authority for Advance Ruling (AAR) has clarified that peeled, chopped, and packed garlic is classifiable under HSN 07032000 and, therefore, attracts no Goods and Services Tax (GST).

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The ruling came on an application filed by Purnam Cuisines Pvt. Ltd., an Ahmedabad-based garlic processing company. The applicant purchases raw garlic bulbs and subjects them to a series of processes, including quality inspection, moisture removal, crushing, peeling, sorting, chopping, and packing, before supplying the final product. The company argued that such processing transformed the garlic into a new product distinct from fresh garlic and thus sought clarity on three issues:

1. Whether the activity of peeling, chopping, and packing garlic amounts to “manufacture.”

2. Whether the product should be classified under HSN 07032000 (“onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled”) or HSN 20055900 (“other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen”).

3. Whether the applicant is required to pay GST on the supply.

Manufacture Issue Outside AAR’s Jurisdiction
On the first question, the AAR declined to answer. It noted that under Section 97(2) of the CGST Act, 2017, an advance ruling may only be sought on specific matters such as classification, applicability of notifications, admissibility of input tax credit, or liability to pay tax. The Authority stated: “The question as to whether a particular process undertaken or proposed to be undertaken would amount to manufacture does not find a mention under the seven matters listed in Section 97(2). We, thus, refrain from answering the said question.”

Classification of Processed Garlic
The applicant argued that peeled and chopped garlic, having undergone significant processing, lost its “fresh” character and should fall under HSN 20055900, which covers “other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen.” It claimed that such garlic was no longer simply a fresh vegetable but a prepared product subject to 12% GST.

The AAR rejected this claim after examining the structure of the Customs Tariff and the explanatory notes. It held that Chapter 7 specifically covers fresh or chilled vegetables, including those which are peeled, chopped, sliced, shredded, pulped, or shelled. The Authority observed that garlic subjected to peeling and chopping still remained fresh or chilled and did not qualify as a product “prepared or preserved” within the meaning of Chapter 20.

It noted: “The explanatory notes of Chapter 07 state that the vegetables of this chapter may be whole, sliced, chopped, shredded, pulped, grated, peeled or shelled. The product of the applicant which is peeled and chopped garlic consequent to undergoing the process would therefore fall in 0703 only.”  The Authority further pointed out that no laboratory evidence had been provided to support the applicant’s assertion that the processed garlic had lost its fresh character.

GST Liability
Since peeled and chopped garlic was held to fall under HSN 07032000, the Authority referred to Notification No. 2/2017-Central Tax (Rate) dated 28 June 2017, which exempts all goods falling under HSN 0703 from GST. Consequently, the supply of peeled, chopped, and packed garlic is not liable to GST.

Final Ruling
Summarising its decision, the AAR ruled:

• The question of whether peeling, chopping, and packing garlic amounts to manufacture was not answered.

• Peeled, chopped, and packed garlic is classifiable under HSN 07032000.

• No GST is payable on such supply as it falls under the exempt category.

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The Gujarat AAR has made it clear that the mere peeling, chopping, and packing of garlic does not alter its classification as a fresh or chilled vegetable under Chapter 7. As such, peeled and chopped garlic continues to be exempt from GST, bringing clarity for businesses engaged in similar processing activities.

Applicant’s Name: Purnam Cuisines Pvt ltd.