In re Sage Organics Private Limited (GST AAR West Bengal)
The Authority for Advance Ruling, West Bengal, considered an application filed under Section 97 of the GST Act seeking clarification on classification, applicable HSN codes, relevant schedules under GST rate notifications, and applicable tax rates for various beverage products manufactured and supplied by the applicant. The products include non-alcoholic beverage preparations such as mojito, rose lemonade, vitamin water variants, iced tea preparations, syrups, beverage concentrates, and extracts, essences and concentrates of tea.
The applicant submitted that its products are healthy, low-calorie, sugar-free beverage preparations intended for human consumption and should not be treated as luxury or sin goods. It proposed classification under specific HSN codes and sought confirmation that the products fall under Schedule II with tax rates of 12% for iced tea and 18% for syrups and concentrates.
The Revenue, relying on relevant rate notifications, opined that non-alcoholic beverages and syrups fall under Schedule III and attract 20% CGST plus 20% SGST, while iced tea preparations and tea extracts fall under Schedule I attracting 2.5% CGST plus 2.5% SGST.
Upon examination of the manufacturing process and ingredients, the Authority found that the non-alcoholic beverages did not contain fruit pulp or fruit juice and therefore could not be classified under tariff item 22029920. Instead, they fall under tariff item 22029990 under heading 2202 as “other non-alcoholic beverages.” Referring to the amended rate notification, the Authority held that such products are covered under Serial No. 2 of Schedule III and are taxable at 20% CGST plus 20% SGST.
