9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 1186 - AAR - GSTClassification of goods - Carbonated Fruit Juice - whether falls under Fruit Juices or Aerated drinks? - HELD THAT - A s per the classification of FSSAI, Fruit juices are unfermented but fermentable product obtained by a mechanical process from sound, ripe fruit or the flesh thereof and processed by heat, in an appropriate manner, before or after being sealed in a container, so as to prevent spoilage and are intended for direct consumption. In the instant case, the product is made by adding fruit juices to large quantities of water along with other preservatives which then goes through a carbonation process. The juices are not meant for direct consumption here but are just one ingredient of the drinks - the fruit juices and carbonated beverages with fruit drinks are distinct products in the FSSAI regulations and the products of the applicant axe covered under Para 2.3.30 of the regulations and Category 14.1.4.1 in the food category system in Appendix A to these regulations. The fruit juices are extracted from fresh, healthy and ripe fruits through various processes followed by filtration to remove solids, aeration, homogenization and sterlisation. Such fruit juices to be classified under CTH 2009 can have added sugar, standardizing agent, preservatives as long as they retain their original character. However, addition of water to normal fruit juice or to a concentrated juice of a greater quantity of water than is necessary to reconstitute the original fruit juice results in diluted products excludes such products from CTH 2009 and are to be classified as beverages of heading 2202 - In the instant case, water constitutes around 92% in all the products in question. The product is prepared by adding fruit juice, procured by the applicant (as per the input invoices submitted), to filter water. It is evident that this large quantity of water results in diluted products which as per the Explanatory Notes above get classified under CTH 2202. Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and Other Non-alcoholic beverages, not including fruit or vegetable juices of Heading 2009 are covered under CTH 2202. Further, The Explanatory Notes classifies Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured under CTH 220210 - In the case at hand, the manufacturing process of the products involves addition of fruit juice (Lime/ Orange), sugar, ingredients, flavours to filtered water in a blending tank, which is chilled at 5 C in the Chilling Tank and then passed through Juice& CO2 Mixing Unit after which the same is bottled for supply in various quantities such as 200 ml, 300 ml, 600 ml, 1500 ml, etc. and are sold as Carbonated Beverage with fruit juice . These beverages fall squarely under the category mentioned in the Para (A) (2) of the Explanatory Notes above. That is they are classifiable under CTH 220210. The products to be supplied by the applicant are to be classified as Richyaa Darner Lemon and Licta Lemon are classifiable under CTH 22021020 and all others i.e. Richyaa Darner Cola , Licta Cola , Richyaa Darner Jeera Soda , Licta Jeera Masala, Richyaa Darner Orange and Licta Orange are classifiable as Other under CTH 22021090.
Issues Involved:
1. Classification of Carbonated Fruit Juice: Whether it falls under Fruit Juices or Aerated drinks. Issue-wise Detailed Analysis: 1. Classification of Carbonated Fruit Juice: The applicant, a manufacturer of fruit juices and carbonated fruit juices, sought an advance ruling on whether their product, Carbonated Fruit Juice, falls under the category of Fruit Juices or Aerated drinks. The applicant argued that their product should be classified under fruit juices based on the GST rate and previous judgments, including the Supreme Court ruling on 'Appy Fizz' under the VAT regime. Applicant's Submission: The applicant contended that their product, Carbonated Fruit Juice, does not fall under the description of Aerated water containing added sugar or sweetening materials. They highlighted that their product contains fruit juice in compliance with FSSAI norms (2.5% for lemon juice and 5% for other juices) and thus should be classified under HSN 22029020, taxable at 12% GST. They provided detailed ingredients, manufacturing processes, and test reports to support their claim. Assistant Commissioner's Comments: The Assistant Commissioner argued that the product sold as "Carbonated Beverage with Fruit Juice" is different from pure fruit juices. According to FSSAI regulations, fruit juices require a minimum of 10% fruit content, whereas the applicant's product contains only 2.5% to 5% fruit juice. Therefore, the product does not qualify as a Fruit Juice or Fruit Beverage. Instead, it should be classified under "Carbonated Beverage with Fruit Juice," which is distinct from carbonated fruit beverages or fruit drinks. FSSAI Regulations: The Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, classify fruit juices and carbonated beverages distinctly. Fruit juices are unfermented liquids obtained from ripe fruits, intended for direct consumption. Carbonated fruit beverages or drinks are prepared from fruit juice and carbonated water with added sugar and other ingredients. The applicant's product fits the category of "Carbonated Beverage with Fruit Juice" as it contains fruit juice below 10% but not less than 5% (2.5% for lime or lemon). Customs Tariff Classification: According to the Customs Tariff Act, 1975, fruit juices are classified under Chapter 2009, which covers unfermented fruit juices without added spirit. However, products with added water resulting in diluted beverages are classified under Chapter 2202, which covers waters, including mineral and aerated waters, containing added sugar or sweetening matter. The applicant's product, with 92% water content, falls under this category. Ruling: The Authority for Advance Ruling concluded that the applicant's products are not classifiable as fruit juices under CTH 2009. Instead, they fall under CTH 2202, specifically: - "Richyaa Darner Lemon" and "Licta Lemon" are classified under CTH 22021020 as Lemonade. - Other products, including "Richyaa Darner Cola," "Licta Cola," "Richyaa Darner Jeera Soda," "Licta Jeera Masala," "Richyaa Darner Orange," and "Licta Orange," are classified under CTH 22021090 as "Other." Conclusion: The applicant's carbonated fruit juices are classified as aerated drinks under the Customs Tariff Act, 1975, and not as fruit juices. The ruling aligns with FSSAI regulations and the Customs Tariff classification system, ensuring that the products are taxed appropriately under GST.
|
