2026 (3) TMI 189 - AAR - GST

Tariff classification assigned to beverages, iced tea and concentrates; corrected HSN codes and GST rates allocated.

The text addresses tariff classification and GST treatment of non-alcoholic beverages, iced tea preparations, syrups and beverage concentrates, and tea ... Classification under customs tariff - entry in GST rate schedules - applicable GST rate under GST 2.0 Classification under customs tariff - Tariff/HSN classification of the applicant's non alcoholic beverages, iced tea preparations, syrups and beverage concentrates, and extracts/essences/concentrates of tea. - HELD THAT: - The Authority examined the product descriptions, ingredient lists and manufacturing processes supplied by the applicant and compared them with the Customs Tariff entries. It found no tariff item numbered 22029020 as suggested by the applicant and identified the closest and correct tariff items by matching the nature and composition of the goods to the headings and sub headings in Chapter 21 and 22. Non alcoholic beverages without fruit pulp or juice fall under heading 2202 and specifically tariff item 22029990. Iced tea preparations and extracts/essences/concentrates of tea fall under heading 2101 and sub heading 210120. Syrups and beverage concentrates are covered by sub heading 210690 and specifically tariff item 21069019. [Paras 4] Non alcoholic beverages: 22029990; Iced tea preparations and tea extracts/essences/concentrates: sub heading 210120; Syrups and beverage concentrates: 21069019. Entry in GST rate schedules - Whether the products qualify for entries in Schedule I or Schedule III of the rate notification. - HELD THAT: - By reference to the rate notification as amended, the Authority mapped the identified tariff items to the schedules. Non alcoholic beverages covered by tariff items 2202 91 00 and 2202 99 90 fall within Serial No. 2 of Schedule III. Iced tea preparations and extracts/essences/concentrates of tea, being under sub heading 210120, fall within Serial No. 136 of Schedule I. Syrups and beverage concentrates under tariff item 21069019 are covered by Serial No. 145 of Schedule I. [Paras 4] Non alcoholic beverages: Schedule III (serial no. 2). Iced tea preparations and tea extracts/essences/concentrates: Schedule I (serial no. 136). Syrups and beverage concentrates: Schedule I (serial no. 145). Applicable GST rate under GST 2.0 - Applicable GST rates for the identified products under GST 2.0. - HELD THAT: - Applying the schedule entries to the tariff items found to be applicable, the Authority determined the tax rates specified in the notification. Goods falling in Schedule III attract the higher rate specified therein, whereas the entries in Schedule I attract the lower rate mentioned against those serial numbers. Having mapped each product to its schedule entry, the corresponding Central and State tax rates were taken from the amended notification. [Paras 4] Non alcoholic beverages (22029990): taxed at 20% CGST + 20% SGST. Iced tea preparations and extracts/essences/concentrates of tea (210120): taxed at 2.5% CGST + 2.5% SGST. Syrups and beverage concentrates (21069019): taxed at 2.5% CGST + 2.5% SGST. Final Conclusion: The Authority ruled the correct tariff classifications as 22029990 for the non alcoholic beverages, sub heading 210120 for iced tea preparations and tea extracts/essences/concentrates, and 21069019 for syrups and beverage concentrates; mapped these items to Schedule I or III of the rate notification as stated; and fixed the applicable GST rates accordingly. Issues: (i) Classification (tariff items/HSN) of non-alcoholic beverages, iced tea preparations, syrups and beverage concentrates, and extracts/essences/concentrates of tea; (ii) Correctness of HSN/tariff item numbers proposed by the applicant; (iii) Whether the products fall under Schedule I or Schedule III of the rate notification; (iv) Applicable GST rates under GST 2.0 for the said products.Issue (i): Classification (tariff items/HSN) of non-alcoholic beverages, iced tea preparations, syrups and beverage concentrates, and extracts/essences/concentrates of tea.Analysis: Classification was determined by comparing product composition and manufacturing process with the Customs Tariff headings and subheadings. Non-alcoholic beverages lacking fruit pulp/juice match heading 2202 and the subheading 2202 99 90. Iced tea preparations and extracts/essences/concentrates of tea correspond to heading/subheading 2101/2101 20. Syrups and beverage concentrates correspond to heading/subheading 2106/2106 90 and specifically tariff item 21069019 based on their formulation and use as concentrates for beverage preparation.Conclusion: Non-alcoholic beverages: tariff item 22029990. Iced tea preparations and tea extracts/essences/concentrates: subheading 210120 (heading 2101). Syrups and beverage concentrates: tariff item 21069019.Issue (ii): Correctness of HSN/tariff item numbers proposed by the applicant.Analysis: The applicant-proposed code 22029020 was not found in the tariff schedule; nearest relevant entries were examined. Tariff numbering and descriptions in the Customs Tariff Act, 1975 were applied to the product descriptions and manufacturing details to verify exact subheading/ tariff item.Conclusion: The applicant's code 22029020 is incorrect; correct codes are 22029990 for non-alcoholic beverages, 210120 (subheading) for iced tea and tea extracts, and 21069019 for syrups and beverage concentrates.Issue (iii): Whether the products fall under Schedule I or Schedule III of the rate notification.Analysis: Relevant entries of Notification No. 1/2017 - Central Tax (Rate) (as amended by Notification No. 09/2025) were mapped to the identified tariff items. The Schedule I and Schedule III entries and their serial numbers were applied to the classified tariff items to determine placement.Conclusion: Non-alcoholic beverages (tariff item 22029990) qualify under Schedule III (serial no. 2). Iced tea preparations and extracts/essences/concentrates of tea (subheading 210120) fall under Schedule I (serial no. 136). Syrups and beverage concentrates (21069019) fall under Schedule I (serial no. 145).Issue (iv): Applicable GST rates under GST 2.0 for the said products.Analysis: The applicable GST rates were determined by reference to the Schedule entries in Notification No. 1/2017 - Central Tax (Rate) as amended by Notification No. 09/2025 and the tariff items assigned to the products.Conclusion: Non-alcoholic beverages (22029990) are taxable at 20% CGST + 20% SGST. Iced tea preparations and extracts/essences/concentrates of tea (210120) are taxable at 2.5% CGST + 2.5% SGST. Syrups and beverage concentrates (21069019) are taxable at 2.5% CGST + 2.5% SGST.Final Conclusion: The advance ruling specifies tariff items and corrects the applicant's proposed HSN numbers, designates the respective Schedule entries under the amended rate notification, and fixes the GST rates for each product category, with some of the applicant's requests accepted and others revised by the Authority.Ratio Decidendi: Classification and applicable GST rates are determined by matching product composition and manufacturing process to the precise Customs Tariff Act headings/subheadings and then applying the corresponding entries in Notification No. 1/2017 - Central Tax (Rate) as amended by Notification No. 09/2025.