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2021 (4) TMI 938 - AAAR - GSTClassification of goods - rate of GST - fruit juice-based drinks - to be classified as “Carbonated beverage with fruit juice” as per Para 3A definition in FSSAI Act or not - taxable under the category of “Other” under CTH 2202 10 90 or otherwise? - persevered percentage of fruit or pulp in the beverages to call them as carbonated fruit beverages or drinks under the GST Act? - challenge to AAR decision - AAR held that product 'K Juice Grape' falls under the category of “Other” under CTH 2202 10 90. The applicable rate of tax is 14% CGST vide Sl.No.12 of Schedule IV under Notification No.11/2017-Central Tax (Rate) and 14% under SGST at 14% vide Sl. No.12 of Schedule IV under Notification No.II(2)/CTR/532(1-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended. HELD THAT:- The product prepared from juice to which water, peel oil, fruit essences and flavours, salt, sugar, invert sugar, etc appropriate to the product are added and processed by heat in an appropriate manner so as to prevent spoilage is categorised under para 2.3.10, above and the products under this category are not carbonated. The manufacturing process furnished by the appellant, states that the process involves, addition of Grape juice (13%) to the filtered sugar solution (86%-76% RO water and 10% Sugar) in a blending tank which is subjected to Mild Thermal Treatment (loss of water by 2 to 3%), cooled to room temperature, to which additives and preservatives as per the formulation and coloring & flavoring agent are added - the products prepared from fruit juice and water or carbonated water with the minimum Fruit content of not less than 10.0 percent in cases of fruits other than Lime or Lemon juice falls under this category. In the case at hand, the product has a content of fruit juice as required under this Regulation 2.3.30, contains sugar and other ingredients appropriate to the product and is carbonated and therefore we do not find any reason to deviate from the finding of the Lower Authority that the product in hand is 'Carbonated Fruit Beverages or Fruit Drinks'. The schema of arrangement in the CTH under consideration is based on whether the product is water/ aerated water flavoured with fruit juices and containing sugar, etc which may be carbonated [220210] or a non-alcoholic beverage of Fruit pulp/juice-based drink [220299]. In the case at hand it is evident that the product contains fruit juice but is not 'Fruit pulp or Fruit juice based drink' but a Carbonated fruit beverage as marketed by the appellant and therefore, the product is not classifiable under CTH 22029920 as claimed by the appellant and is rightly classifiable under CTH '2202 1090-Other' as has been decided by the lower authority who have dealt in detail the applicable Food regulations as per FSSAI and the CTH 2202 readwith the explanatory notes to arrive at the said conclusion. Pre-GST Tax incidence on the product was 40% whereas in the GST regime, it was proposed to be taxed at 28%. GST Council has agreed to the recommendation as can be seen from the Minutes of the Meeting, the relevant para is: From item No. 43 to 57 of Annexure-III. the Council had no objection and approved the recommendation of Fitment Committee. The Hon’ble Minister from Uttar Pradesh raised the issue about item at SI. No. 58 of Annexure III i.e. Extra Neutral Alcohol (ENA). There are no reason to interfere with the Order of the Advance Ruling Authority in this matter - appeal disposed off.
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