X’SS Beverage CO. Vs State of Assam (Gauhati High Court)
Gauhati High Court heard a series of writ petitions filed by X’SS Beverage Co. challenging a GST classification dispute involving their carbonated fruit and ready-to-serve drinks. The dispute arose from differing interpretations of the applicable tariff codes under the Customs Tariff Act, 1975. The petitioner classified their products under Tariff Item 2202 99 20, which attracts a 12% GST rate, arguing that the items are “fruit pulp or fruit juice-based drinks.” However, the State Tax authorities classified them under Tariff Item 2202 10 90, categorizing them as carbonated beverages with a higher GST rate of 28% plus a 12% cess.
The petitioner contended that their products comply with Regulation 2.3.30 of the Food Safety and Standards (Food Products Standards and Food Additives) Regulation, 2011, which mandates a minimum fruit juice content of 10% (or 5% for lime/lemon) and specific labeling requirements. They further argued that their classification aligned with precedents such as CCE Bhopal vs. Parle Agro Pvt. Ltd. and Parle Agro (P.) Ltd. vs. Commissioner of Commercial Taxes, Trivandrum, where courts held similar products as fruit juice-based drinks. Additionally, the petitioner relied on amendments introduced by the Ministry of Finance in 2021, which created a distinct classification for “carbonated beverages with fruit drinks,” taxable at 14% GST and 12% cess post-October 1, 2021.
