The Gauhati High Court has held that the Fruit pulp, juice-based carbonated drinks are not ‘akin’ to ‘water’ and attract 12% GST and not 28% GST.
The bench of Justice Soumitra Saikia has observed that carbonated fruit drinks and ready to serve fruit drinks 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 petitioner/assessee, X’SS Beverage Co. is in the business of manufacture and sale of carbonated fruit drinks and ready to serve fruit drinks. The petitioner is a partnership firm and is represented in the present proceedings by the Managing partner.
The assessee contended that 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 petitioner contended that these carbonated fruit drinks qualify as fruit beverages or fruit drinks. It is the case of the petitioner that the products manufactured by the petitioner are regularly tested at the State Public Health Laboratory, Government of Assam where sample products are sent for testing.
From the report of analysis of food sample, it is clear that goods supplied by the petitioner comprises of fruit juice content more than 10% solids, sugar (sucrose) acidity regulators and synthetic food colors and it confirms to the specifications stipulated in Regulation 2.3.30 of FSSAI for carbonated beverage with fruit juice. All particulars including the details of the fruit concentrate are described on the label of the respective products.
According to the petitioner, 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. According to the petitioner, these carbonated fruit drinks qualify as fruit beverages or fruit drinks.
It is the case of the petitioner that the products manufactured by the petitioner are regularly tested at the State Public Health Laboratory, Government of Assam where sample products are sent for testing. From the report of analysis of food sample, it is clear that goods supplied by the petitioner comprises of fruit juice content more than 10% solids, sugar (sucrose) acidity regulators and synthetic food colors and it confirms to the specifications stipulated in Regulation 2.3.30 of FSSAI for carbonated beverage with fruit juice. That apart, all particulars including the details of the fruit concentrate are described on the label of the respective products.
On the basis of the classification adopted by the petitioner, it filed the GST returns regularly upon payment of appropriate taxes at the rate of 12%. The classifications of the products were duly described in the invoices raised and the returns filed by the petitioner.
The department contended that since the products manufactured and sold by the petitioner contains carbonated water along with added sugar or sweetening matter or flavor, the goods are to be covered under HSN 2202 10 90 and are liable to be taxed at 28% GST along with cess at the rate of 12%.
The court while allowing the writ petition held that fruit juice based drink were 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).
Case Details
Case Title: X’SS Beverage Co. Versus State Of Assam
Case No.: W.P(C) NO. 5347/2022
Date: 04.03.2025
Counsel For Petitioner: A. Saraf, Sr. Counsel assisted by Mr. P.K. Bora
Counsel For Respondent: B. Gogoi, SC, Finance & Taxation
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