In re M/s Kalis Sparkling Water Private Limited (GST AAAR Tamilnadu)
The Customs Tariff under single dash(-)CTH 2202 10 includes Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured and under the said (-), CTH 2202 10 90(with a (—)) covers others. The above heading as per the Explanatory notes covers Beverages that are often aerated with carbon dioxide gas and are generally presented in bottles or other airtight containers. The Customs tariff under single dash (-) CTH 220299 includes Other non-alcoholic beverages, not including fruit or vegetable juices of heading 2009 and under the said single dash (-), CTH 2202 99 20(with a (—)) covers ‘Fruit pulp or fruit juice based drink’. Thus, the heading 220299 as per the Explanatory Notes covers non-alcoholic beverages and includes Tamarind nectar rendered ready for consumption, Certain other beverages with the basis of milk and cocoa.
9.3 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.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, TAMILNADU
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
The subject appeal is filed under Section 100(1) of the Tamilnadu Goods & Services Tax Act 2017/Central Goods & Services Tax Act 2017 (hereinafter referred to ‘the Act’) by M/s. Kalis Sparkling Water Private Limited (hereinafter referred to as `Appellant). The appellant is registered under GST vide GSTIN 33AADCK8591Q1ZR. The appeal is filed against the Order No.48/ARA/2019 dated 17.10.2019 passed by the Tamilnadu State Authority for Advance ruling on the application for advance ruling filed by the appellant.
2. The Appellant has stated that their company Kalimark, is a 103-year-old beverage manufacturing company. They are engaged in manufacture of new products (carbonated fruit drink/fruit juice without adding milk) and the sample has been taken which will be sold in the market name as Juice Grape’. The method of preparation of the said carbonated beverages with fruit juice is stated as follows: Processing RO Water Thermal Process Processed Fruit Juice concentrate —> Blending —-> carbonization —-> Filling —-> Bottling —4 Capping—-> Labelling —4 Shrink Wrapping. The appellant has stated that carbonated fruit beverages are specifically explained in Chapter 2.3.30 and 2.3.3A of the FSSAI Act. As per the GST Act and its schedule, the rate of tax on the fruit pulp or fruit juice-based drink classified under the HSN Code 2202 is liable to be taxed at 12%. They had sought the Advance Ruling Authority to clarify whether their fruit juice-based drinks should be called as “Carbonated beverage with fruit juice” as per Para 3A definition in FSSAI Act and the applicable GST along with Classification as per HSN.
3. The Original Authorities has ruled as follows:
The 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.I12:L7-Central Tax (Rate) and 14% under SGST at 14% vide S 1.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.
4. Aggrieved by the above decision, the Appellant has filed the present appeal. The grounds of appeal are as follows:
> The Advance Ruling Authority’s finding that the appellant’s product K Juice Grape which are sold as fruit juice based drinks will fall under serial number serial no.12 of schedule IV under notification no.1/2017(Rate) and thereby leviable at 14% CGST and 14% SGST on the ground that the product falls under the category of ‘others” under CTH 2202 10 90, is against the facts and settled proposition of Law laid down by the Hon’ble Supreme Court of India in similar and identical facts of case in the matter of M/s. Parle Agro Private Limited Vs The commissioner of commercial taxes, Trivandrum, Kerala reported in 106 VST Page 1.
> The Authority for Advance Ruling failed to appreciate the fact that there is a specific entry enumerating “Fruit Juice Based Drinks” under the GST schedule attracting 12% tax and the Customs Tariff Head (CTH) also having a similar entry. The relevant entries under the both Acts are extracted below. Chapter 2202 OF Customs Tariff Covers:
2202 99 20 Fruit Pulp or Fruit Juice based drinks
Entry under GST Act:
