Apple And Malt Cola Fizzy Attracts 28% GST And 12% GST Compensation Cess: Gujarat AAR

The applicant, Mohammed Hasanbhai Kabalai, submitted that it intends to supply thermally processed ready-to-serve fruit beverages, which shall be ready-to-serve fruit beverages with different flavours. Presently, the applicant is not registered under GST.

The applicant intended to supply apple juice based drinks under the names of "Apple Cola Fizzy" and "Malt Cola Fizzy". Both the drinks are apple juice-based drinks, having the same ingredients and manufacturing process. The second one has an added flavour of malt.

The applicant stated that the products would be commercially marketed as apple juice-based drinks or fruit juice-based drinks, and that labels affixed to the products would expressly state this.

The applicant submitted that the difference in the rate of tax charged by various other manufacturers is quite huge. Charging a 40% rate of tax when competitors are charging 12% makes the product unsellable and the whole margin gets eaten up subsequently.

The applicant has sought an advance ruling on the issue of classification and applicable tax rate on the supply of ready-to-serve fruit beverages named "Apple Cola Fizzy" and "Malt Cola Fizzy" made by the applicant under Notification No. 1/2017–CT (Rate) dated 28.06.2017 as amended up to date.

The applicant contended that drinks prepared from juice concentrates and other ingredients, including water, sugar, flavours, etc., and processed by heat are classifiable under the category of 'Thermally Processed Fruit Beverages/Fruit Drinks/Ready to Serve Fruit Beverages'. On the other hand, carbonated fruit beverages or fruit drinks may be prepared from carbonated water or by the process of carbonation. However, thermal processing or processing by heat is not a trait of carbonated beverages.

The AAR observed that "Apple Cola Fizzy" and "Malt Cola Fizzy" are carbonated beverages with fruit juice. The Fitment Committee has cited the classification of carbonated beverages with fruit juice at HSN 220210.

Applicant's Name: M/s. Mohammed Hasabhai Karbalai

Citation: ADVANCE RULING NO. GUJ/GAAR/R/2022/02

Dated: 07.03.22

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