M/s. S.P. Jeyapragasam (HUF) No: 76, Amman Sanathi, Madurai – 625 001. (hereinafter referred to as ‘Applicant’) is a registered taxable person. They are registered under GST vide GSTIN No. 33AAJHS5092MIZL. The Applicant has preferred an application seeking Advance Ruling on the following Question:
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 has submitted the copy of application in Form GST ARA – 01 and submitted a copy of Challan evidencing payment of application fees of each under Sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017.
2. The applicant in the statement of facts has stated that they are going to manufacture beverages with fruit juices and without milk. Some of the industries in this field informed that fruit pulp or fruit juice based drinks fall under HSN Code 22029020 liable to be taxed at 12%. Recently the fruit juice based drinks shall be called as “Carbonated beverage with fruit juice” as per the definition available under the FSSAI Act. The relevant definition is extracted below:
“3A. In case the quantity of fruit juice is below 10.0 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 he quantity of fruit juice shall be declared on the label”.
Hearing:
3. The applicant was heard on 28.03.2019. They appeared and gave a written submission. They stated that they are intending the manufacture through 3rd party a fruit juice based aerated drink. They stated that they will submit accredited laboratory testing, FSSAI or State Government Notification along with samples, procurement invoices/ agreement for the product which they intend to sell in two weeks time. Another hearing is requested in this case. The Jurisdiction central Authority submitted that if fruit content is less than 10% it should be 22021010 at 28% and more than 10% as 22029920 @ 12%.
3.1 In the written submissions, the applicant has inter-alia stated that:-
MANUFACTURING PROCESS;
Processing RO Water ———> Preparation of sugar Syrup Solution Thermal Process —–> Add Concentrate (Recipe) > Add Thermally Processed fruit Juice Concentrate ———->Blending ——–>Carbonization ——–>Filling ——–> Capping ——–>Labelling —–> Shrink Wrapping
S.No. | Ingredients Name | UOM | Percentage (%) |
1 | Sugar Quantity | gms | 17% |
2 | Sugar Syrup | ml | 21.59286% |
| Bovonto Concentrate | Ml | 0.62936% |
4 | Sodium Benzoate | Gms | 0.01234% |
5 | Citric Acid | Gms | 0.08997% |
6 | Fruit Juice | Ml | 10% |
7 | Water | ml | 51.1937% |
“2.3.30 Carbonated fruit beverages or fruit drinks:
1. Carbonated fruit beverages of 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.
2. The product 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 Percent
b. Other fruits -Not less than 10. Percent
3. The product shall have the colour, taste & flavor characteristic of the product & shall be free from extraneous matter.
(3A. In case the quantity of fruit juice is below 10.0 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.)
Thus 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.
“Whether the decision and opinion of Food Safety Authorities on the product in question were relevant?”
While deciding the above issue the Hon’ble Court elaborately discussed and gone through the various reports and materials given by the authorities issued under FSSAI Act and also held that the opinion and orders of the food safety authority were relevant for the purpose of interpretation of entry and finally held that the product:
“APPY FIZZ” is only a fruit based drink even though carbon content is there which is only used as preservation purpose.
3.2 The applicant was granted second opportunity of personal hearing as requested by them on 24.07.2019. The applicant in their undated memo received on 17th July 2019 submitted that they are not willing to proceed further in the said application due to personal reasons and therefore withdraw their application in AAR No. 15/2019 and requested to withdraw their application. The applicant appeared in the personal hearing and reiterated their willingness to withdraw their application. Therefore, the applicant is allowed to withdraw their application and ordered accordingly
4. In view of the above, we rule as under:
Ruling
The application filed by the Applicant for Advance Rulings is dismissed as withdrawn.