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2019 (8) TMI 1219 - AAR - GSTClassification of goods - FANTA FRUITY ORANGE - whether the product FANTA FRUITY ORANGE with 10.5% Orange juice, would be classifiable under Tariff Item 2202 99 20 as Fruit pulp or fruit juice based drinks or under 220210 at Sl. No. 12 under Schedule IV as All goods including aerated waters , containing added sugar or other sweetening matter or flavoured ? - N/N. 1/2017-Central Tax (Rate) dated 28.06.2017 (as amended) and Notification No. 1/2017- State Tax (Rate) dated 30.06.2017 (as amended). HELD THAT - As per the label of the product, Orange Juice Concentrate is 1.6% of the product. As submitted by the applicant, the Orange Juice is reconstituted out of this Orange Juice Concentrate. Under the circumstances, a question arises whether the product Fanta Fruity Orange can be termed as Fruit pulp or fruit juice based drinks . It is pertinent to note that the terms used in the said tariff item is Fruit pulp or fruit juice based drinks and the said entry do not refer to the term Fruit juice concentrate based drinks. Therefore, the said entry would cover the Fruit pulp based drinks or Fruit juice based drinks only. The Fruit juice concentrate based drink are not covered under the said entry. It is not the case of the applicant that the product Fanta Fruity Orange is manufactured from Fruit pulp or Fruit juice as the said product is undisputedly manufactured from Orange Juice Concentrate . Under the circumstances, the said product do not fall under the Tariff Item 2202 99 20. Thus, the product Fanta Fruity Orange would not fall under Tariff Sub Heading 2202 10, but it would fall under Tariff Sub Heading 2202 99. Further, the said product is not a Fruit pulp or fruit juice based drinks , therefore it would not fall under Tariff Item 2202 99 20. The said product is neither Soya milk drinks nor beverage containing milk therefore it would also not fall under Tariff Item 2202 99 10 or 2202 99 30. Therefore, the product Fanta Fruity Orange is appropriately classifiable under Tariff Item 2202 99 90 as Other non-alcoholic beverages, other than tender coconut water and would attract Goods and Services Tax @ 18% as per Sr. No. 24A of Schedule- III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended and Notification No. 1/2017-State Tax (Rate) dated 30.06.2017, as amended.
Issues Involved:
1. Classification of "Fanta Fruity Orange" under the appropriate tariff heading. 2. Determination of the applicable GST rate for "Fanta Fruity Orange." Issue-Wise Detailed Analysis: 1. Classification of "Fanta Fruity Orange" under the appropriate tariff heading: The applicant, M/s. Hindustan Coca-Cola Beverages Private Limited, sought an advance ruling on whether "Fanta Fruity Orange" should be classified under: - CH 22029920 as "Fruit pulp or fruit juice based drinks" (Schedule II), - CH 22029990 as "Other non-alcoholic beverages" (Schedule III), or - CH 220210 as "All goods [including aerated waters], containing added sugar or other sweetening matter or flavoured" (Schedule IV). The applicant argued that "Fanta Fruity Orange," containing 10.5% orange juice, should be classified under Tariff Item 2202 99 20 as "Fruit pulp or fruit juice based drinks." They supported this with various interpretations and definitions, emphasizing that the product is based on fruit juice which imparts its essential character. However, the Authority for Advance Ruling (AAR) noted that the product is made from orange juice concentrate (1.6% of the product) and not directly from fruit pulp or fruit juice. The AAR emphasized that the tariff item 2202 99 20 specifically covers drinks based on fruit pulp or fruit juice, not fruit juice concentrate. This distinction is crucial as the tariff item does not include "fruit juice concentrate based drinks." The AAR also referenced a CESTAT decision in a similar case involving the applicant, where it was determined that drinks made from concentrates do not qualify as fruit pulp or fruit juice-based drinks under the relevant tariff heading. 2. Determination of the applicable GST rate for "Fanta Fruity Orange": Given the classification under Tariff Item 2202 99 90 as "Other non-alcoholic beverages," the applicable GST rate was determined to be 18% (CGST 9% + SGST 9%), as per Sr. No. 24A of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended, and Notification No. 1/2017-State Tax (Rate) dated 30.06.2017, as amended. The AAR concluded that "Fanta Fruity Orange" does not fall under the categories of "Soya milk drinks" or "Beverages containing milk," and thus, it is appropriately classified under Tariff Item 2202 99 90. Ruling: The product "Fanta Fruity Orange" manufactured and supplied by M/s. Hindustan Coca-Cola Beverages Private Limited is classifiable under Tariff Item 2202 99 90. The applicable GST rate for the product is 18% (CGST 9% + GGST 9%) as per Sl. No. 24A of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended, and Notification No. 1/2017-State Tax (Rate) dated 30.06.2017, as amended.
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