TaxTMI 
TaxTMI 
2022 (9) TMI 841
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....ant also registered under CGST/KGST Act 2017. The applicant launched a non-alcoholic malt drink called 'Kingfisher Radler', in 2018, classified the said product under tariff heading 2209 9100, as non-alcoholic beer. 3. In view of the above, the applicant has sought advance ruling in respect of the following question: Whether the non-alcoholic malt drink "Kingfisher Radler' is covered as "Carbonated beverages of fruit drink or carbonated beverages with fruit juice" of chapter heading 2202, under Entry 12B of Notification No.1/2017 dated 28.06.2017 (as introduced by Notification No.8/2011-Central Tax (Rate) dated 30.09.2021). 3 (b) Admissibility of the Application : The applicant is seeking advance ruling in respect of classification their product "Kingfisher Radler." The advance ruling on the question "classification of any goods or services or both" can be sought by the applicant under Section 97 (2) (a) of the CGST Act 2017. Hence the instant application is admissible in terms of Section 97(2)(a) of the CGST Act 2017. 4. BRIEF FACTS OF THE CASE: The applicant furnished the following facts relevant to the issue having bearing on the question raised. ....
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.... sugar as compared to sweetened carbonated waters or carbonated fruit-based beverages. The product is minimally carbonated to add effervescence and freshness to the drink and contains additives to regulate acidity and preserve the drink. A distinction between the product and carbonated beverage of fruit juice is tabulated below: Particulars Product Carbonated beverage HSN 2202 91 00 2202 Classification Non-alcoholic beer Carbonated beverage with fruit juice Ingredients Barely Malt, Invert sugar, Mixed fruit juice, flavours, hops and other additives Sugar, Apple Juice, flavour and other additives Calories (per 100 ml) 38 Kcal 54 Kcal Sugar (per 100m1) 9.3 gms 13.6 gmgs The Ingredients used in the product are tabulated hereunder: Sl.No. Ingredients Ginger Lime (in%) Lemon (in %) Mint lime (in %) 1 Barley malt 4.03 2.94 2.77 2 Sugar 9 10.10 9.50 3 Mixed fruit juice (Equivalent reconstituted juice concentrate) 0.05 1.11 1.05 4 Hops 0.01 0.01 0.01 5 Quillaia Extract 0.04 0.02 0.02 6 Carbon Dioxide 0.52 0.52 0.52 7 W....
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....licant is filling the present application seeking an advance ruling on coverage of the product under the said entry. 5. Applicant's Interpretation of Law: 5.1 As per Section 9 of the CGST Act, GST is leviable on supply of goods / services at rates as may be notified. The CGST rates are notified under Notification No. 1/2017 - Central Tax (rate) dated 28th June 2017 and SGST rates are notified under corresponding State Notification (jointly referred as 'the GST rate Notification'). In respect of certain specified goods, Notification No. 1/2017-Compensation cess (rate) dated 28.06.2017 provides the applicable rate of Compensation cess. 5.2 Principles for interpretation of the tariff : The GST rate Notification(s) are based on the first Schedule to the Customs Tariff Act (CTA). As per Explanation (iv) to the GST rate Notifications, the rules of interpretation and the Section and Chapter Notes of the Schedule to the CTA are applicable for interpretation of the GST rate Notifications. Given this, judicial pronouncements on classification of goods under Customs and Excise laws, and HSN explanatory notes" are relevant guides for determining classification under the GS....
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....cle should be classified under the customs Tariff (as applicable to GST) on the basis of its popular sense, i.e., the sense in which people conversant or dealing with the commodity would attribute to it. Reliance in this regard is placed on the decision in Asian paints India Ltd v. Collector of Central Excise [1988 (35) E.L.T (SC)] Wherein it was held that while interpreting items in taxing statutes whose primary object was to raise revenue and for which purpose to classify diverse products, resort shall be made to their popular meaning, that is to say, the meaning attached to them by those dealing in them. b. It is submitted that the product is marketed and understood in common trade parlance as 'non-alcoholie beer' and on this basis alone it deserves to be classified under Tariff item 2202 91 00. Therefore, the product cannot be said to be covered under the amendment Notification as 'Carbonated beverages of fruit drink or carbonated beverages with fruit juice'. c. It is submitted that the product is understood in common trade parlance and marketed as 'non-alcoholic beer' and is widely available in retail stores as well as e-commerce platf....
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....derstood as a drink obtained / made from fruit. Since the product at hand is made from malt and contains traces of fruit only for flavouring purpose, it cannot be considered as "Carbonated beverages of fruit drink". c. Further, a search on the web browser using term 'fruit drink' will show results for products like maaza, minute maid, real fruit drinks, etc., while a search of 'carbonated fruit drink' will show results for products like Appy Fizz, Shunya Go, Shunya Fizz, Frusia, etc. These searches will not show results of the product at hand. Few links showing these results is given below and search results of the same is captured at Exhibit 'D'. d. The description of goods covered by the amendment Notifications under Chapter Heading 2202 'Carbonated beverages of Fruit Drink or Carbonated beverages with fruit juice' is in line with the classification adopted by the Food Safety and Standards Authority of India (the FSSAI'), which is the regulator for the Food sector. The Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 (the FSS Regulations') set out the categorisation of foods for pres....
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.... h. In view of the above, the product at hand is not a fruit drink and is neither understood nor sold as a fruit drink and hence, cannot be termed as carbonated fruit beverage or fruit drink. 5.5 Product does not qualify as "Carbonated beverages with fruit juice" a. As mentioned at Para 5.4 (c) above, the product is understood and sold as non-alcoholic malt or beer without alcohol. The product at hand was conceived, developed, launched, and is sold as a non-alcoholic alternative to beer. Further, the product is characteristically different from the commonly available "Carbonated beverages with fruit juice". b. In common parlance, the Product is not understood or sold as carbonated beverage with fruit juice. The manufacturing process of carbonated beverages with fruit juice commences with blending sugar syrup with fruit juice, flavours and other ingredients whereas in case of the product, the manufacturing process is similar to that of brewing beer where firstly the malt is extracted and processed at various stages to obtain wort and thereafter sugar, flavour and other ingredients are blended for taste and preservation purposes. This is not the manner in which t....
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....ooz Masala Soda and Nimbooz have lemon juice content exceeding 5% • As per the Common parlance test, the labels of the product clearly indicated that the said products are bought and sold in the market as "Fruit drink with lemon juice" having a lemon juice content of 5% or more and are described as Ready to Serve Fruit Drink and not as Lemonades or Lemon / Lime Flavoured Drinks f. It is apparent from the above judicial precedents that the criteria uniformly followed to determine whether a product is fruit juice / pulp content in it. In the present case, the product contains maximum 1.1 1% of fruit juice (reconstituted juice is also a maximum of 4.3%) which is less than the prescribed criteria (minimum of 5% in case of lime and lemon and 10% in other case of fruit pulp or juice). Therefore, the product cannot be classified as carbonated fruit beverage / fruit drink. 5.6 2202 91 00 is specific entry chargeable to 18% and will not be covered under general entry a. On the basis of common law principles, the product merits classification under an entry which is most akin to its description rather than a generic entry. This principle is enunciated in the....
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.... e. Accordingly, since the more specific classification is under entry 2202 91 00 (non-alcoholic beer), and by application of Rule 3(a) of the General Rules and the above judicial ratios, the more specific description will prevail over general, the product cannot be covered under 'Carbonated Beverages of fruit drink or Carbonated beverages with fruit juice under 2202' as mentioned at Entry 12B and Entry 4B of the said amendment Notifications. f. The Applicant submits that the entry in the amendment Notifications are general entries classifying goods at 4-digit level. On a joint reading of the FSSAI and Tariff classifications, it appears that the amendment Notifications seeks to cover beverages falling under tariff item 2202 99 20 even if they are carbonated and does not seek to cover novel products like malt-based beverage or non-alcoholic beer which has small quantities of fruit juice only for the purpose of flavouring. g. The purpose of the amendment Notifications appears to tax carbonated and sweetened beverages. However, the product in question is not a sweetened carbonated beverage but rather a malt / grain-based beverage containing much less sugar (3....
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....a and have the same provisions in like matters and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts along with the arguments made by the applicant & the submissions made by their learned representative during the time of hearing. 10. The applicant filed the instant application seeking advance ruling with regard to classification of their product "Kingfisher Radler", manufactured & made available in three flavours i.e. Ginger lime, Mint lime and Lemon. The applicant submitted that the said product is a non-alcoholic malt beverage, an agri based product, containing barley malt, lesser sugar, manufactured out of natural ingredients such as barley, hops etc., along with antioxidants and preservatives. Further since the barley malt has a peculiar bitter taste sugar and juice com....
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....cribed under the said Regulation and therefore the product does not qualify as 'Carbonated Fruit Beverages or Fruit Drinks' or 'Carbonated beverage containing fruit juice'. g) Hon'ble Supreme Court in Parle Agro case [2017 (352) 113 SC] observed that the use of carbon dioxide to the extent of 0.6% was only for preservation and not sufficient to qualify the product as aerated. The product at hand contains only 0.5% approx. of carbon dioxide, less than the quantity observed by the Hon'ble Supreme Court and hence the product cannot be considered as aerated / carbonated. h) Without prejudice, even if the product is considered as 'carbonated beverage with fruit juice', still entry No.24A to be preferred in terms of well settled law. The Hon'ble Supreme Court in the case of CCE Vs Minwood Rock Fibres Ltd., [2012 (278) ELT 581 (SC)] held that in case there are two competitive entries for classification of a product, the heading most beneficial to the assesse is to be adopted. 12. The applicant further, vide their letter dated 22.08.2022, received in this office on 23.08.2022, furnished additional written submissions, without prejudice t....
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....OTHER SWEETENING MATTER OR FLAVOURED, AND OTHER NON-ALCOHOLIC BEVERAGES, INCLUDING FRUIT OR VEGETABLE JUICES OF HEADING 2009 2202 10 - Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or favoured: 2202 10 10 --- Aerated Waters 2202 10 20 --- Lemonade 2202 10 90 --- other 1 -other: 2202 91 00 -- Non alcoholic beer 2202 99 --Other: 2202 99 10 -- Soya milk drinks, whether or not sweetened or flavoured 2202 99 20 -- Fruit pulp or fruit juice based drink 2202 99 30 -- Beverages containing milk 2202 99 90 --other We proceed to examine whether the impugned product qualifies to be a non-alcoholic beer or not. In this regard we invite reference to the Explanatory Note 3 to chapter 2202 wherein it is specified that "for the purposes of heading 2202, the term 'non-alcoholic beverages' means beverages of an alcoholic strength by volume not exceeding 0.5% vol." Further Explanatory Notes to Chapter Heading 2202 specify that the said heading covers non-alcoholic beverages. This heading consists of three groups (A,B &C) and the group (B) i.e. "non-alcoholic" beer" incl....
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....inger lime variant is not considered as its production is discontinued, as per the applicant. Thus it could be inferred that the predominant component of the product is mixed fruit juice content. 16. We also invite reference to the images and labels of the variants of the product, furnished by the applicant as 'Exhibit-B', in Annexure-I to the application. The details of the product variants have been tabulated as under : Label Description Ingredients Examination Report Ginger & Lime Added Ginger & Lime Flavours Water, Sugar, Barley Malt, Carbon Dioxide (INS290), Preservative (INS 211), Acidity Regulator (INS 330), Quillia Extract (INS999), Mixed Fruit Juice (0.01%) & HOPS Discontinued the product. Fizzy Lemon Malt Added Lemon Flavour Water, Invert Sugar, Barley Malt (2.94%), Mixed Fruit Juice (4.3%), Carbon Dioxide (INS 290), Quillia Extract (INS 999) HOPS & Antioxidant (INS 300) Equivalent mixed fruit juice content is 4.3% as per the report Fizzy Lemon Malt Added Mint & Lime Flavours Water, Invert Sugar, Barley Malt (2.77%), Mixed Fruit Juice (4%), Carbon Dioxide (INS 290), Quillia Extract (INS 999) HOPS & Antioxidant (INS 3....