9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 938 - AAAR - GSTClassification of goods - rate of GST - fruit juice-based drinks - to be classified as Carbonated beverage with fruit juice as per Para 3A definition in FSSAI Act or not - taxable under the category of Other under CTH 2202 10 90 or otherwise? - persevered percentage of fruit or pulp in the beverages to call them as carbonated fruit beverages or drinks under the GST Act? - challenge to AAR decision - AAR held that product 'K Juice Grape' falls under the category of Other under CTH 2202 10 90. The applicable rate of tax is 14% CGST vide Sl.No.12 of Schedule IV under Notification No.11/2017-Central Tax (Rate) and 14% under SGST at 14% vide Sl. No.12 of Schedule IV under Notification No.II(2)/CTR/532(1-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended. HELD THAT - The product prepared from juice to which water, peel oil, fruit essences and flavours, salt, sugar, invert sugar, etc appropriate to the product are added and processed by heat in an appropriate manner so as to prevent spoilage is categorised under para 2.3.10, above and the products under this category are not carbonated. The manufacturing process furnished by the appellant, states that the process involves, addition of Grape juice (13%) to the filtered sugar solution (86%-76% RO water and 10% Sugar) in a blending tank which is subjected to Mild Thermal Treatment (loss of water by 2 to 3%), cooled to room temperature, to which additives and preservatives as per the formulation and coloring flavoring agent are added - the products prepared from fruit juice and water or carbonated water with the minimum Fruit content of not less than 10.0 percent in cases of fruits other than Lime or Lemon juice falls under this category. In the case at hand, the product has a content of fruit juice as required under this Regulation 2.3.30, contains sugar and other ingredients appropriate to the product and is carbonated and therefore we do not find any reason to deviate from the finding of the Lower Authority that the product in hand is 'Carbonated Fruit Beverages or Fruit Drinks'. The schema of arrangement in the CTH under consideration is based on whether the product is water/ aerated water flavoured with fruit juices and containing sugar, etc which may be carbonated 220210 or a non-alcoholic beverage of Fruit pulp/juice-based drink 220299 . In the case at hand it is evident that the product contains fruit juice but is not 'Fruit pulp or Fruit juice based drink' but a Carbonated fruit beverage as marketed by the appellant and therefore, the product is not classifiable under CTH 22029920 as claimed by the appellant and is rightly classifiable under CTH '2202 1090-Other' as has been decided by the lower authority who have dealt in detail the applicable Food regulations as per FSSAI and the CTH 2202 readwith the explanatory notes to arrive at the said conclusion. Pre-GST Tax incidence on the product was 40% whereas in the GST regime, it was proposed to be taxed at 28%. GST Council has agreed to the recommendation as can be seen from the Minutes of the Meeting, the relevant para is From item No. 43 to 57 of Annexure-III. the Council had no objection and approved the recommendation of Fitment Committee. The Hon ble Minister from Uttar Pradesh raised the issue about item at SI. No. 58 of Annexure III i.e. Extra Neutral Alcohol (ENA). There are no reason to interfere with the Order of the Advance Ruling Authority in this matter - appeal disposed off.
Issues Involved:
1. Classification of the product "K Juice Grape" under the GST Act. 2. Applicable GST rate for the product. 3. Determination of the product as a fruit beverage or fruit-based drink. 4. Consideration of the percentage of fruit or pulp in the beverage to classify it under the GST Act. Issue-Wise Detailed Analysis: 1. Classification of the Product "K Juice Grape" under the GST Act: The appellant contended that their product, "K Juice Grape," is a thermally processed fruit beverage complying with category 2.3.10 of the FSSAI regulations, 2011. They argued that the product should be classified under CTH 2202 9920 as a fruit juice-based drink. The Lower Authority, however, classified the product under CTH 2202 10 90, categorizing it as "Other" under waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavored. The Appellate Authority upheld this classification, noting that the product is carbonated and falls under the category of "Carbonated Fruit Beverages or Fruit Drinks" as per Para 2.3.30 of the FSSAI regulations. 2. Applicable GST Rate for the Product: The Lower Authority determined that the applicable GST rate for "K Juice Grape" is 14% CGST and 14% SGST, totaling 28%. This decision was based on the classification of the product under CTH 2202 10 90. The appellant argued that the product should attract a 12% GST rate under the entry for fruit juice-based drinks. The Appellate Authority, however, found that the product is not merely a fruit juice-based drink but a carbonated beverage, thus justifying the higher tax rate. 3. Determination of the Product as a Fruit Beverage or Fruit-Based Drink: The appellant claimed that their product is a fruit-based drink, citing the Supreme Court's ruling in the "Appy Fizz" case, which classified a similar product as a fruit juice-based drink. However, the Appellate Authority distinguished the present case from the "Appy Fizz" case, noting that "K Juice Grape" is marketed as a carbonated fruit beverage and falls under the specific category of carbonated fruit drinks as per FSSAI regulations. Therefore, it does not qualify as a mere fruit juice-based drink. 4. Consideration of the Percentage of Fruit or Pulp in the Beverage: The appellant argued that the product contains 13% grape juice concentrate and should be classified based on its fruit content. The Appellate Authority, however, emphasized that the product's carbonation and its classification under Para 2.3.30 of the FSSAI regulations as a carbonated fruit beverage take precedence over the fruit content percentage. The Authority concluded that the product's carbonation for preservation purposes and its marketing as a carbonated beverage justify its classification and the applicable GST rate. Conclusion: The Appellate Authority upheld the Lower Authority's classification of "K Juice Grape" under CTH 2202 10 90 and the applicable GST rate of 28%. The Authority found that the product is a carbonated fruit beverage, not merely a fruit juice-based drink, and thus does not qualify for the lower tax rate. The appeal was disposed of accordingly, affirming the Lower Authority's decision.
|
