Sugarcane juice classified as processed product under HSN 20098990, attracts 12% GST not agricultural produce exemption

The AAR, UP ruled that sugarcane juice cannot be classified as agricultural produce under GST as it undergoes processing that alters its essential characteristics and form through crushing. The Authority determined that sugarcane is neither fruit nor vegetable but falls under "other parts of plants" category. Applying General Rules for Interpretation of Import Tariff Rule 3(a), sugarcane juice is classified under HSN 20098990 in Chapter 20 (preparation of vegetables, fruits, nuts or other parts of plants). The juice attracts GST at 12% (6% CGST + 6% SGST or 12% IGST) as per Notification No. 1/2017 Central Tax (Rate) Schedule 2.

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Issues Involved:
Classification of Sugarcane Juice, Rate of GST applicable on sale of Sugarcane Juice, Applicability of a notification affecting the tax rate.

Classification of Sugarcane Juice:
The applicant, a sugar manufacturer, sought clarification on the classification of sugarcane juice for GST purposes. The Authority examined the definition of agricultural produce and determined that sugarcane juice does not meet the criteria to be classified as agricultural produce. As sugarcane juice is not a fruit or vegetable, it falls under the category of "other parts of plants." Following the General Rules for the Interpretation of Import Tariff, the Authority classified sugarcane juice under chapter 20 and tariff item 20098990, taxable at 6% CGST & 6% SGST or 12% IGST.

Rate of GST on Sale of Sugarcane Juice:
Regarding the rate of GST applicable on the sale of sugarcane juice, the Authority referred to Notification No. 1/2017 Central Tax (Rate) dated 28-06-2017. Although there was no specific entry for sugarcane juice, the closest entry was found at Sr. No. 41 of Schedule II of the notification, attracting a tax rate of 6% CGST and 6% SGST or 12% IGST. Therefore, the Authority ruled that sugarcane juice is taxable at this rate.

Applicability of Notification Affecting Tax Rate:
The Authority confirmed that Notification No. 1/2017 Central Tax (Rate) dated 28/6/2017 would be applicable to determine the tax rate on the sale of sugarcane juice. This notification covers the classification and taxability of fruit juices and vegetable juices, unfermented and not containing added spirit, aligning with the classification of sugarcane juice under chapter 20 and tariff item 20098990.

Conclusion:
The Authority, comprising two members, unanimously ruled that sugarcane juice is classifiable under chapter 20 and tariff item 20098990, taxable at 6% CGST & 6% SGST or 12% IGST. The ruling is valid within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh, subject to the provisions under Section 103(2) of the CGST Act, 2017, unless declared void under Section 104(1) of the Act.

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