Common parlance classification placed Appy Fizz within aerated branded soft drinks, not fruit juice, for Kerala VAT.

Appy Fizz was treated as an aerated branded soft drink, not fruit juice, for Kerala VAT classification. The analysis applied the common parlance or commercial parlance test because the relevant entry did not carry an HSN code. It noted that the product contained only a small percentage of fruit juice used as flavouring, while the operative tax entry for the assessment year prescribed 20% tax for aerated branded soft drinks excluding soda. On that basis, the fruit juice entry under SRO No. 82/2006 was found inapplicable, and HSN-based customs or central excise authorities were not treated as determinative.

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Issues: Whether Appy Fizz was classifiable as fruit juice falling under entry 71(2) of SRO No.82/2006 and taxable at 12.5%, or as an aerated branded soft drink taxable at 20% under Section 6(1)(a) of the Kerala Value Added Tax Act.

Analysis: The applicable provision for the relevant assessment year prescribed 20% tax for aerated branded soft drinks excluding soda. The notification entry relied on by the assessee covered fruit juice and other non-aerated beverages, while the material on record showed that the product was an aerated soft drink containing only a small percentage of fruit juice, used merely as a flavouring ingredient. The Rules of Interpretation under the KVAT regime required goods without an HSN number to be understood in common parlance or commercial parlance. Since the entry in question did not carry an HSN code, classification had to be made on that basis. On that approach, the product did not fall within the fruit juice entry and could not derive assistance from HSN-based decisions under customs or central excise law.

Conclusion: Appy Fizz was held to be an aerated branded soft drink taxable at 20% under Section 6(1)(a) of the Kerala Value Added Tax Act, and the assessee's challenge to the assessment failed.

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