Carbonated grape juice to face 28% GST, rules AAAR

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A taste of fizz has led to grape juice manufactured and distributed by a Tamil Nadu-based company being expelled out of the classification of ‘Fruit pulp or fruit juice-based drinks’, which attracts a lower goods and services GST at 12%. In this article, we will discuss on Carbonated grape juice.

GST on Carbonated grape juice

A taste of fizz has led to grape juice manufactured and distributed by a Tamil Nadu-based business being expelled out of the classification of Fruit pulp or fruit juice-based drinks’, which attracts a lower goods and services tax (GST) of 12%.

Instead, ‘K-Juice Grape’ exchanged by Kalis Sparkling Water will be subject to GST at 28% as the Appellate Authority for Advance Rulings (AAAR) has carried it to be a Carbonated beverage with fruit juice.

Further, the company had earlier contended that their commodity is a thermally processed fruit beverage, complying with para 2.3.10 of the FSSAI regulations, the Authority for Advance Rulings (AAR) had held otherwise. This order of the AAR has now been approved at the appellate level.

Further Notification by Central Government

The AAAR differentiated the case on hand from an order of the Supreme Court, which was allotted in the case of Appy Fizz a fruit juice-based drink. In that case, the apex court had given a judgment that fruit juice-based drinks are not dealt with as aerated branded soft drinks as they have a separate entry category.

Regardless, the AAAR characterized that the Supreme Court’s order will not correlate as it is evident that K-Juice Grape is a carbonated fruit beverage, as dealt by the company. While it includes fruit juice, it is not a fruit pulp or fruit juice-based drink.

In yet another example case pertaining to beverages, flavoured milk was previously held to be a ‘beverage containing milk subject to GST at 12%. This ruling was provided by the Gujarat bench of the AAR in the case of Vadilal Industries.

On the other hand, earlier the Karnataka AAR had held flavoured milk to decline in the classification of ‘milk and cream, concentrated or including added sugar or other sweetening matter’, which brings a lower GST of 5%.

Short Analysis of Composition Scheme Under GST

If you want any other guidance related to GST Registration or GST Return filing, please feel free to talk to our business advisors at 8881-069-069.

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