In re Benz Fishing Baits Pvt. Ltd. (GST AAR Tamil Nadu)
Summary: The Tamil Nadu Authority for Advance Ruling examined an application by Benz Fishing Baits Pvt. Ltd. concerning the classification and GST rate of a fermented grape beverage marketed as “Royal Toast” and described as “Non-alcoholic Red Wine”. The applicant manufactured the product using black grapes, water, sugar and yeast, allowing fermentation for seven to ten days before filtering and bottling. It had classified the beverage under HSN 22029100 and paid GST at 40% following the revised rate structure under Notification No. 9/2025-Central Tax (Rate). The applicant sought classification under HSN 22029920 as a fruit pulp or fruit juice-based drink attracting 5% GST, referring to the treatment reportedly adopted by competitors.
The Authority considered the manufacturing process, FSSAI licence, laboratory records and the distinction between ordinary fruit juice and fermented beverages. It observed that yeast converts fruit sugars into alcohol and carbon dioxide, making the fermented product materially different from ordinary fruit juice. Accordingly, it did not accept the proposed classification as a fruit pulp or fruit juice-based drink. It further noted that, under Chapter Note 3 to Chapter 22 of the HSN and the relevant Food Safety and Standards (Alcoholic Beverages) Regulations, a beverage must have alcohol content not exceeding 0.5% by volume to qualify as non-alcoholic.
On examining the evidence, the Authority found that a Food Analysis Laboratory certificate dated 15 May 2014 recorded alcohol content of 2.0%, but was more than a decade old. A subsequent test report dated 28 August 2026 was issued by a private testing laboratory rather than a certified government laboratory authorised for such testing, as required by the Authority for its determination. In the absence of acceptable current documentary evidence establishing alcohol by volume, the Authority held that it could not determine the correct HSN classification or applicable GST rate. No ruling was given on either question; the Authority did not affirm the applicant’s claimed 5% rate or conclusively determine an alternative rate.
FULL TEXT OF THE ORDER OF THE AUTHORITY FOR ADVANCE RULING, TAMIL NADU
M/s Benz Fishing Baits Pvt. Ltd, having place of business at No.45/6, Raasi Vinayagar Street, Shanmugam Nagar, Guduvanchery 603202, Tamil Nadu (hereinafter called as the ‘Applicant’) is registered under the Goods and Service Tax Act, with GSTIN 33AAACB4479R1Z6. They have filed an application for Advance Ruling under Sec.97 of the CGST Act, 2017(hereinafter referred to as the `Act’) and the corresponding provision Sec.97 of the TNGST Act, 2017. The Applicant has made the payment of Rs.10,000/- towards application fees, under sub rule (1) of Rule 104 of CGST Rules, 2017 and TNGST Rules, 2017.
2. Statement of relevant facts having a bearing on the questions raised.
The Applicant states that they are engaged in the business of manufacturing Non alcoholic fermented grape juice with added sugars, and were classifying the same under HSN 2202 9100 and paying GST C 40% ( as per S.No.2 of Schedule HI of 9/2025– CT (R)) and they state that the product is for the benefit of health conscious customers and does not contain alcohol.
The applicant submitted a step-by-step process of manufacture of their product along with a copy of their supply invoice, copies of purchase invoices of raw materials/ packing materials/labels etc. that were used in the manufacture of their product, – ‘Non-alcoholic Red Wine’, which was sold/supplied/ marketed under the brand name – ‘Royal Toast’.
In addition to these, the applicant also submitted copies of the license issued by FSSAI to them (12414008000853) valid up to 26.03.2029, for the manufacture of ‘Non alcoholic beverages’ and a Certificate of Analysis dated 15.05.2014, issued by the Food Analysis Laboratory, Tamil Nadu Food Safety and Drug Administration department, King Institute, Chennai.
They also submitted a copy of the proceedings dated 08.12.2014, of the Authority for Clarification and Advance Ruling, from the State Govt. of Tamil Nadu, before whom they had filed an application seeking clarification on the Rate of tax on “Non alcoholic Beverage(Red Wine)” sold with a brand name’.
The applicant state that, consequent to the reforms introduced vide GST 2.0, it appeared that their product may be classified as ‘Fruit drinks with added sugar’ attracting 5% GST under HSN 2202 9920 – fruit pulp or fruit juice based drinks (other than carbonated beverages of fruit drink or carbonated beverages with fruit juice) (as per S.No. 150 of Schedule I of 9/2025-CT (R) dated 17.09.2025)
3. The applicant has therefore, sought an Advance Ruling, under Sec.97(2)(a) and (b) of the CGST Act, 2017, on the following questions:
1. Classification/HSN: What is the correct HSN code for Non-alcoholic fermented grape, apple etc., fruit juices/ beverages with added sugar but not carbonated?
2. Rate of tax : What is the rate of tax for Non-alcoholic fermented fruit juices/ beverages with added sugar but not carbonated?
4. Applicant’s interpretation of law:
The Applicant, inter alia, submitted the process of manufacture of their product `Non-alcoholic Red wine’. The same is extracted hereunder-
4.1 PROCESS OF_MANUFACTURE -_NON ALCOHOLIC_BEVERAGES:
1. RAW MATERIALS: Water -Black Grapes – Sugar – Yeast.
2. The Grapefruit purchased from the local vendor is rinsed for up to three times in warm water, crushed using a presser and will be kept in ceramic jars.
3. Purified Mineral water and sugar are added to the juice.
4. Further, yeast is added and stirred thoroughly.
5. The mixture is kept in the jar for a week to ten days and then filtered three times to remove the seeds and skin from the juice.
6. The juice is packed in bottles as and when orders are received.
7. The manufacturing process does not include any other materials than Grape Fruit, Water, Sugar and Yeast.
8. The process is 100% natural with no addition of colours, no addition of preservatives and no addition of flavours.
9. The product will have slight variations in colour and taste at every batch of production due to changes in weather conditions, water management, cutting frequencies, storage, transportation etc.,
10. The product is delivered in natural form and do not intend to fix colour or taste to create a specific brand taste/colour.
4.2 The applicant produced a copy of the FSSAI license issued to them by the Government of Tamil Nadu, dated 13.03.2024, for the manufacture of ‘Noncarbonated Water based Beverages (Non-Alcoholic)’.
4.3 They also produced the ‘Certificate Of Analysis’ issued by the Food Analysis Laboratory, TN Food Safety and Drug administration department, dated 15.05.2014, on their sample – ‘Red wine-Non Alcoholic Beverage’.
4.4 Further, they also produced a copy of the proceedings dated 08.12.2014, of the Authority for clarification and Advance Ruling, in their own case, wherein they got a ruling from the State government of Tamil Nadu, on the ‘Rate of tax on Non alcoholic Beverage (Red Wine)- when sold with a brand name’.
5. The applicant is under the administrative control of State. The concerned authorities of the Centre and State were addressed to report if there are any pending proceedings against the applicant on the issues raised by the applicant in the ARA application and for comments on the issues raised. A report in this regard, in GEXCOM/TECH/MISC/12380/2026 dated 18.07.2026, was received from the Additional Commissioner, CGST Chennai Outer Commissionerate, wherein it has been reported that no proceedings on the questions raised in the application are pending/ decided against the applicant, under the provisions of the Act.
6. Personal Hearing
The applicant was given an opportunity to be heard in person on 06.07.2026. Shri R. Ramaesh Rajan, Director, M/s. Benz Fishing Baits (P) Ltd., along with Ms. D.Revathi, Secretary, appeared for the personal hearing. He reiterated the submissions made in their application for advance ruling.
He explained that, post GST 2.0, they have been supplying their product-`Non-alcoholic Red Wine’, with GST @ 40% (2202 9100); that, prior to GST 2.0, the same was supplied at 18%; He further stated that, however, post GST 2.0, their competitors were supplying similar products with GST @ 5%, by classifying them as fruit pulp or fruit juice based drinks (2202 9920) and that, prior to GST 2.0, the same was sold by their competitors @ 12% GST.
Hence, a ruling was requested as to whether their product, viz. ‘Nonalcoholic Red Wine’, could also be classified as fruit pulp or fruit juice based drinks, under chapter head 2202 9920, attracting GST @ 5%.
7. Discussions and Findings:
7.1 We have carefully examined the submissions made by the applicant in their advance ruling application and the submissions made during the personal hearing. We have also considered the issue involved, the relevant facts and the applicant’s submission / interpretation of law in respect of question on which the advance ruling is sought.
7.2 We find that the queries are liable for admission as they get covered under Sec 97(2)(a) and Sec 97(2)(b) of CGST/TNGST Act, 2017, under, (a) classification of any goods or services or both; (b)applicability of a notification issued under the provisions of the CGST/TNGST Act, respectively.
7.3 We find that the applicant, M/s Benz Fishing Baits Pvt. Ltd., No.45/6, Raasi Vinayagar Street, Shanmugam Nagar, Guduvanchery 603202, Tamil Nadu, registered with the GST department with GSTIN 33AAACB4479R1Z6, is engaged in the business of manufacture and supply of Non alcoholic fermented grape juice with added sugars, made by using black grapes, water, sugar and yeast. We find that the applicant has been supplying their product as Von-alcoholic Red wine’ under the brand name ‘Royal Toast’, classifying the same under HSN 2202 9100 and paying GST @ 40% (CGST – 20% and SGST – 20%), post GST 2.0.
They state that, post GST 2.0, their competitors were classifying similar products under HSN 2202 9920 as fruit pulp or fruit juice based drinks and were paying only 5% GST. Hence, they seek to clarify, if they could also classify their product like wise and have filed the instant Advance Ruling application, with the following questions,
(i) What is the correct HSN code for Non-alcoholic fermented grape, apple etc., fruit juices/beverages with added sugar but not carbonated;
(ii) What is the rate of tax for Non-alcoholic fermented fruit juices/ beverages with added sugar but not carbonated.
7.4 We shall now proceed to analyse the facts on hand under the provisions of law and answer each one of the above questions, in that order. We also find that the applicant has requested to examine if their product could be classified under HSN 22029920 as ‘fruit pulp or fruit juice based drinks’ attracting 5% GST, in par with their competitors.
On examination of the facts presented by the applicant as well as those available on record, the following points are discerned.
7.4.1 From the nomenclature of the product, as well as the facts presented by the applicant, the product for which classification/correct HSN code is sought, i.e. Von-alcoholic Red wine’, can be said to have a minimum of the following five characteristics. The beverage is (i) claimed to be Non-alcoholic in nature; (ii) to be fermented; (iii)to have added sugar; (iv)to be not carbonated; and (v) to be made from fruits such as grape/apple.
7.4.2 The applicant states that they use black grapes, water, sugar and yeast, in the manufacture of their product. As per the process of manufacture described by them, the black grapes procured from local vendors are thoroughly rinsed, crushed and stored in ceramic jars; this is followed by addition of purified water and sugar to the crushed mixture and finally, by addition of yeast, for fermentation. This mixture is kept in the jar for a week to ten days and then filtered three times to remove seeds and the skin from the juice and is then packed in bottles, as and when orders are received.
At this juncture, it is pertinent to note that the applicant admits to the usage of ‘Yeast’ in the fermentation of the crushed grape juice. The role of yeast in winemaking is the most important element that distinguishes wine from fruit juice. Yeast converts the sugars of the fruit into alcohol and carbon-di-oxide through the process of fermentation. The fermented fruit juice is fundamentally different from normal fruit juice. A few of such differences are captured below.
| Characteristics | Normal Fruit Juice | Fermented Fruit Juice |
|---|---|---|
| Sugar & Alcohol Content | Fruit’s high natural sugar content is retained. | Microorganisms like yeast consume these sugars, resulting in a much lower-sugar beverage that contains alcohol, probiotics and other organic compounds. |
| Microbiome & Gut Health | Contains no active probiotics. | Has live, beneficial microbes that act as probiotics, supporting digestion and gut flora. |
| Flavour & Texture | Tastes purely sweet and distinctly fruity. | Fermented juice develops a complex, tangy and slightly sour flavour profile, often with sparkling or lightly carbonated textures. |
Thus, the usage of yeast in the fermentation process by the applicant, coupled with the fact that the product is sold as ‘Non-alcoholic Red wine’, fortifies the understanding that the impugned product cannot be termed as fruit juice.
7.4.3 Further, as per para 3.1 of the Food Safety and Standards (Alcoholic Beverages) Regulations, 2018 (as amended up to January 2026), Wine’, a fermented fruit beverage, is defined as, “Save as specifically mentioned in different categories, wine shall be the un-distilled alcoholic beverage produced by the partial or complete alcoholic fermentation of the juice of fresh sound ripe grapes, including grape juice concentrate, restored or unrestored pure condensed grape must, and raisins”.
Therefore, it is unambiguously clear that the product manufactured by the applicant is a fermented beverage and cannot be termed as fruit pulp or fruit juice based drinks (other than carbonated beverages of fruit drink or carbonated beverages with fruit juice).
7.4.4 Having decided that the applicant’s product is not fruit pulp or fruit based drinks, but a fermented beverage, we now proceed to examine it to determine the correct classification under HSN.
Harmonised System of Nomenclature (HSN) standardizes the classification of goods across countries, ensuring uniformity in trade and taxation and helps to determine correct tax rates, exemptions and compliance. We find that, at present, the applicant classifies the product under HSN 22029100 and terms it as ‘Nonalcoholic Red Wine’.
Though, the applicant terms their product as ‘Non-alcoholic Red Wine’, it is imperative that the product is established to be actually ‘Non-alcoholic’, by virtue of it’s alcohol content. Chapter 22 of the HSN deals with ‘Beverages, spirits and vinegar’ and the notes to Chapter 22 prescribes the norms for alcohol content in a product, for it to be termed as ‘Non alcoholic’, and the same is also defined in the Food Safety and Standards (Alcoholic Beverages) Regulations, 2018. (Relevant parts extracted below).
- As per Chapter Note 3 to Chapter 22,
“For the purpose of heading 22.02, the term “non-alcoholic beverages” means beverages of an alcoholic strength by volume not exceeding 0.5% vol. Alcoholic beverages are classified in headings 22.03 to 22 Or heading 22.08 as appropriate.”
- As per para 1.2.8a of the Food Safety and Standards (Alcoholic Beverages) Regulations, 2018 (as amended up to January 2026), “non-alcoholic counterpart of alcoholic beverage” means non-alcoholic beverage having alcohol content less than or equal to 0.5% alcohol by volume, which shall meet all the requirements of respective alcoholic beverage of origin except the ethyl alcohol content. Additionally, the alcoholic beverage of the origin must undergo the process of fermentation and the produced alcohol is removed thereafter.
Thus, it is explicitly clear that, for a product to be termed as ‘non alcoholic’, the alcohol content in the product should be less than or equal to 0.5% ABV (alcohol by volume).
7.4.5 In this context, the certificate of analysis dated 15.05.2014, issued to the applicant, by the Food Analysis Laboratory, Tamil Nadu Food Safety and Drug administration department, was examined and it was found that the certificate describes the applicant’s product as ‘Red wine – Non Alcoholic beverage’ with an alcohol content of 2.0%. However, it was seen that this report was more than a decade old, and hence the applicant was addressed to submit a new certificate of analysis, of their product. Accordingly, the applicant submitted a test report dated 28.08.2026, issued by M/s SGS India (P) Ltd. We find that this report has been issued by a private testing laboratory and not by a certified government laboratory authorised for such testing. As observed supra (refer chapter notes to Chapter 22 of the HSN), the alcohol content (ABV) in the impugned product, is a vital point to be conformed, to qualify as ‘Non-alcoholic’, which, in the instant case cannot be determined without valid documentary evidence.
Therefore, in the absence of necessary, valid, documentary proof, the correct HSN code for Von-alcoholic fermented grape, apple etc., fruit juices/ beverages with added sugar but not carbonated’ and the rate of tax for the said product, cannot be determined. Accordingly, no ruling is given to the questions raised in the impugned application for Advance Ruling.
8. Accordingly, no Ruling given.
