GUWAHATI: The Gauhati High Court recently declared that carbonated fruit juices are subject to 12% Goods and Services Tax (GST) instead of 28%.
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In a ruling that may reduce summer expenses for the middle class, the court stated that carbonated juices cannot be classified as ‘carbonated water alone.’ Citing a 2017 notification, Justice Soumitra Saikia’s bench ruled that ready-to-serve fruit drinks and carbonated fruit drinks should be taxed at 12% GST.
The ruling has effectively nullified the GST demand raised against the petitioner X’SS Beverage. GST officials had argued that since the beverages contained carbonated water, they should fall under the higher tax bracket. However, X’SS Beverage maintained that fruit juice was the primary ingredient in its products, justifying a lower tax rate.
Granting the company’s plea, the court ruled that fruit juice-based drinks should be classified under aerated branded soft drinks. It further stated that there was no reason for subordinate authorities to include these beverages under the Notification issued under Section 6(1)(d).
The court also relied on the Rules for Interpretation of the Customs Tariff Act, 1975, which state that when a product does not fit precisely into one category, it should be classified based on its essential nature. The ruling also referred to the case of Parle Agro’s ‘Appy Fizz’ while making its decision.
With this verdict, the court ruled in favour of the petitioner.