TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1366
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....pplicant') is registered under the GST Act 2017 vide GSTIN No. 33AADCK8591Q1ZR. The Applicant has sought Advance Ruling on the following questions: 1. What is the rate of tax and HSN Code for fruit beverages or drinks with HSN Code? 2. The definition under the FSSAI Act in section 2.3.3.A can be taken as an aid to classify the product? If so kindly clarify. 3. Is there any persevered percentage of fruit or pulp in the beverages to call them as carbonated fruit beverages or drinks under the GST Act? The applicant submitted a copy of challan evidencing payment of application fees of Rs. 5, 000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2. The applicant stated that they are going to manufacture beverages with fruit juices and without milk. They understand from the industry that fruit pulp or fruit juice based drinks fall under HSN code 22029020 liable to be taxed at 12%. They state that fruit juice based drinks should be called as "Carbonated beverage with fruit juice" as per Para 3A definition in FSSAI Act. 3.1 The applicant was extended an opportunity to be heard in person on 28.08.2019 and was heard. They gave a written submission stating....
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....roduct may contain food additives permitted in these regulations including appendix A. The product shall conform to the microbiological requirements given in Appendix B. It shall meet the following requirements: (i) Total soluble solids (m/m) - Not less than 10.0 percent (ii) Fruit content (m/m) a. Lime or Lemon juice - Not less than 5.0% b. Other fruits - Not less than 10.0. Percent 3. The product shall have the colour, taste & flavor characteristic of the product & shall be free from extraneous matter. As per FSSAI Clause 3A in case the quantity of fruit juice is below 10.00 percent, but not less than 5.0 percent. (2.5 percent, in case of lime or lemon), the product shall be called 'carbonated beverage with fruit juice and in such cases the requirement of TSS (Total soluble solids) shall not apply and the quantity of fruit juice shall be declared on the label. The applicant has contended that it could be evidenced from the above said definition both categories of carbonated beverages of fruit juice or fruit drink are treated as one and the same having the same meaning. 3.4 The applicant has also stated that as per the GST Act and its schedule, the rate of tax on the ....
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....rape' Grape Flavuored Drink'. The product is called as 'Carbonated Fruit Beverage' with ingredients Carbonated water, sugar, grape juice, acidity regulator, preservative, permitted colour and added flavor. 4.1 The applicant vide letter dated 11.09.2019 received on 13.09.2019, furnished additional submissions detailing the manufacturing process with quantities of each raw materials used in the production and modified the queries in the Advance Ruling Application by mentioning/inserting the name of their specific product for clarification. The manufacturing process with the quantities of each raw material is as follows: Product: Grape Based Carbonated Fruit Drink (200ml) Production Capacity: 10,000 liters Processing Flow Chart Prepare the sugar solution (10%) at 75-80 deg Celsius in blending tank (Minimum capacity: 1000 ltrs) ¯ Filter the sugar solution using to remove the unwanted impurities ¯ Transfer the sugar solution to the silo / tank and Mix pasteurized / aseptically packed, grape juice (13%) ¯ Blend it at 80 deg Celsius (15-20 sec) - Mild Thermal Treatment (Loss of water - 2 to 3%) ¯ Cool it to Room temperature. ¯ Weigh and add the add....
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....vance Ruling can be sought. For ease of reference, the section is reproduced as under: 97 (2) the question on which the advance ruling is sought under this Act, shall be in respect of,- (a) Classification of any goods or services or both; (B) Applicability of a notification issued under the provisions of this Act; (c) Determination of time and value of supply of goods or services or both; (d) Admissibility of input tax credit of tax paid or deemed to have been paid; (e) Determination of the liability to pay tax on any goods or services or both; (f) Whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. The Act limits the Advance Ruling Authority to decide the issues earmarked for it under Section 97 (2) and no other issue can be decided by the Advance Ruling Authority. Of the above questions on which ruling is sought by the applicant, the question at (1) and (3) do not fall under any of the category specified under Section 97 (2) of the Act and therefore are not within the ambi....
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.... before or after being sealed in a container, so as to prevent spoilage and are intended for direct consumption. In the instant case, the product is made by adding fruit juices to large quantities of water along with other preservatives which then goes through a carbonation process. The juices are not meant for direct consumption here but are just one ingredient of the drinks. Para 2.3.30 of the above Regulations states 2.3.30 Carbonated Fruit Beverages or Fruit Drinks: 1. Carbonated Fruit Beverages or Fruit Drink means any beverage or drink which is Purported to be prepared from fruit juice and water or carbonated water and containing sugar, dextrose, invert sugar or liquid glucose either singly or in combination. It may contain peel oil and fruit essences. It may also contain any other ingredients appropriate to the products. ............ 3A. in case the quantity of fruit juice is below 10.0 per cent. But not less than 5.0 per Cent. (2.5 per cent. In case of lime or lemon), the product shall be called 'carbonated Beverages with fruit juice' and in such cases the requirement of TSS (Total Soluble Solids) shall not apply and the quantity of fruit juice shall be declared on....
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.... the food category system in Appendix A to these regulations. 6.3 In terms of explanation (iii) and (iv) to Notification No. 1/2017 - Central Tax (Rate) dt. 28-06-2017, tariff heading, sub-heading, heading and chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall be applied for the interpretation and classification of goods. 6.4 The relevant entries of the Customs Tariff is given under for ease of reference: Chapter 2009 of Customs Tariff covers fruit juices (including grape must) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter. Chapter Note 6 of Chapter 20 states "For the purposes of heading 2009, the expression "juices, unfermented and not containing added spirit" means juices of an alcoholic strength by volume (see Note 2 to Chapter 22) not exceeding 0.5% volume." HSN Explanatory Notes to Chapter 2009 state....
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....prevent fermentation (e.g., sulphur dioxide, carbon dioxide, enzymes). (4) Standardising agents (e.g., citric acid, tartaric acid) and products added to restore constituents destroyed or damaged during the manufacturing process (e.g., vitamins, colouring matter), or to "fix" the flavour (e.g., sorbitol added to powdered or crystalline citrus fruit juices). However, the heading excludes fruit juices in which one of the constituents (citric acid, essential oil extracted from the fruit, etc.) has been added in such quantity that the balance of the different constituents as found in the natural juice is clearly upset; in such case the product has lost its original character. The vegetable juices of this heading may also contain added salt (sodium chloride), spices or flavouring substances. However, the addition of water to a normal fruit or vegetable juice, or the addition to a concentrated juice of a greater quantity of water than is necessary to reconstitute the original natural juice, results in diluted products which have the character of beverages of heading 22.02. Fruit or vegetable juices containing a greater quantity of carbon dioxide than is normally present in juices tr....
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....sp; - Other : 7202.91 - - Non-alcoholic beer 2202.99 - - Other This heading covers non-alcoholic beverages, as defined in Note 3 to this Chapter, not classified under other headings, particularly heading 20.09 or 22.01. (A) Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured. This group includes. inter alga (1) Sweetened or flavoured mineral waters (natural or artificial). (2) Beverages such as lemonade, orangeade, cola, consisting of ordinary drinking water, sweetened or not, flavoured with fruit juices or essences, or compound extracts, to which citric acid or tartaric acid are sometimes added. They are often aerated with carbon dioxide gas, and arc generally presented in bottles or other airtight containers. (B) Other non-alcoholic beverages, not including fruit or vegetable juices of heading 20.09. This group includes, inter alia : (1) Tamarind nectar rendered ready for consumption as a beverage by the addition of water and sugar and straining. (2) Certain other beverages ready for consumption. such as those with a basis of milk and cocoa. From the above, it is seen that, 'Waters, inclu....
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....mulsifying and stabilising agents, citric acid, numeric acid and sorbitol, tartaric acid, phosphoric acid, lactic acid, ascorbic acid, malic acid, edible gums such as guar, karaka, carobean, furcellaran, tragacanth, gum ghatti, edible gelatin, albumin, licorice and its derivatives, salts of sodium, calcium and magnesium, vitamins, Caffeine not exceeding 145 parts per million, Estergum (Glycerol ester of wood resin) not exceeding 100 parts per million, Gellan Gum at GMP level and quinine salts not exceeding 100 parts per million (expressed as quinine sulphate). It may also contain Saccharin Sodium not exceeding 100 ppm or Acesulfame-K not exceeding 300 ppm or Aspertame (methyl ester) not exceeding 700 ppm. Or sucralose not exceeding 300 ppm or Neotame not exceeding 33 ppm. Category 14.1.1 of Appendix A to the regulations states 14.1.1 Waters Includes natural waters (14.1.1.1) and other bottled waters (14.1.1.2), each of which may be non-carbonated or carbonated. 14.1.1.2 Table waters and soda waters Includes waters other than natural source waters that may be carbonated by addition of carbon dioxide and may be processed by filtration, disinfection, or other suitable means.....