While ruling that flavoured milk will attract a lower rate of goods and services tax (GST) of 5%, the Madras High Court has limited the powers of the GST Council in determining the classification of a product and held that the role of the GST Council is only recommendatory.

The recent ruling, which comes in a writ petition filed by Parle Agro challenging the classification of flavoured milk, relied on the Supreme Court ruling in Mohit Mineral Private Limited, where the apex court held that the recommendations of the GST Council are not binding on the Union and states.

It held that the principle of noscitur a sociis must be applied to the meaning of ‘Beverage containing milk’ and concluded that it pertains only to plant or seed-based milk and not to dairy milk. Chapter 4 of the GST tariff classification includes dairy products including milk.