X’SS Beverage Co. Vs State of Assam (Gauhati High Court)
Gauhati High Court held that carbonated fruit drinks is classifiable under CTH 2202 99 20 since it is fruit pulp or fruit juice based drinks and hence chargeable to GST @12%.
Facts- The petitioner is in the business of manufacture and sale of carbonated fruit drinks and ready to serve fruit drinks. According to the contentions of the writ petitioner, these products are classifiable under Tariff Item 2202 99 20 of the Customs Tariff Act, 1975 and are specified as serial No.48 under Schedule-II as “fruit pulp or fruit juice based drinks” in notification No.1 of 2017 – Integrated Tax (Rate) dated 28.06.2017 and are taxable at the rate of 12%.
However, the department was of the view that the goods manufactured and supplied by the petitioner contains carbonated water as an ingredient and as such these items were classifiable under Tariff Sub-Heading 2202 10 90 and it attracts GST at the rate of 28% and compensation cess at the rate of 12%.
Conclusion- The only ground on which the Revenue has classified the subject product under sub-heading 2202 10 is that it contains carbonated water. However, a quick reference to the Tariff schedule makes it clear that Sub-heading 2202 10 is primarily ‘WATER’ and it also includes mineral waters/ aerated waters /water containing added sugar or sweetening matter or flavour whereas sub-heading 2202 99 includes ‘OTHERS’ which are further described under the said subheading. The Tariff heading 2202 99 20 is seen to be for fruit pulp or fruit juice based drinks.
