Classification of 'Fanta Fruity Orange' under Tariff Item 2202 99 90 and Applicable GST Rate

The product "Fanta Fruity Orange" manufactured by M/s. Hindustan Coca-Cola Beverages Private Limited is classified under Tariff Item 2202 99 90. The applicable GST rate for the product is 18% (CGST 9% + SGST 9%) as per relevant notifications. The classification was based on the product not being directly made from fruit pulp or fruit juice but from orange juice concentrate.

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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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