Carbonated Fruit Drinks Qualify As Fruit Beverages, Taxable At 12% GST: Gauhati High Court

The Gauhati High Court stated that carbonated fruit drinks qualify as fruit beverages and are taxable at 12% GST. The Bench of Justice Soumitra Saikia opined that “where the subject product contains soluble solids and fruit content as per the report of the State Food Laboratory, it cannot be said to be akin to water, mineral water or aerated water. Mere presence of carbon dioxide or carbonated water cannot be treated to classify the subject items under water or carbonated water. The classifications by the petitioner of the items under the subject head Fruit Pulp or Fruit Based Drink appear to be correct.” In this case, the assessee/petitioner is in the business of manufacture and sale of carbonated fruit drinks and ready to serve fruit drinks. According to the assessee, carbonated beverages with fruit drinks should not have less than 10% fruit juice (5% in case of lime or lemon) and total soluble solids not less than 10% as per Regulation 2.3.30 of Food Safety and Standards (Food Products Standards and Food Additives) Regulation, 2011. The assessee submitted that these carbonated fruit drinks qualify as fruit beverages or fruit drinks. These products are classifiable under Tariff Item 2202 99 20 of the Customs Tariff Act, 1975 and are specified as serial No.48 under Schedule-II as “fruit pulp or fruit juice-based drinks” in notification No.1 of 2017 – Integrated Tax (Rate) dated 28.06.2017 and are taxable at the rate of 12%. The Revenue submitted that the assessee's finished products are manufactured from “fruit concentrates” and not from fruit pulp or fruit juice along with Carbonated Water, Sugar, Sweetener, added flavours (natural and nature-identical flavouring substances). Hence it cannot be classified under the entry 2202 99 20 i.e. “Fruit pulp or fruit juice-based drinks” and therefore disputes the contentions made by the assessee. The bench noted that the subject products are “Fruit Juice Based Drink” classifiable under the Tariff Item 2202 99 20 of Schedule-II of CGST/IGST Rate Notification and that Tariff heading 2202 10 would cover only those beverages which are prepared with flavours. The bench after referring to various judgments noted that the fruit juice-based drink was also to be covered by aerated branded soft drink, there was no occasion for the subordinate authorities to include the said products in Notification under Section 6(1)(d). In view of the above, the bench allowed the petition. Case Title: X'S Beverage CO. v. The State of Assam Case Number: W.P(C) NO. 5347/2022 Counsel for Petitioner/ Assessee: A. Saraf Counsel for Respondent/ Department: B. Gogoi Click Here To Read/Download The Order

Carbonated Fruit Drinks Qualify As Fruit Beverages, Taxable At 12% GST: Gauhati High Court

Mehak Dhiman

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