Fruit-based fizzy drinks to draw 40% rate under GST after Gujarat ruling
The authority did not agree with a petitioner’s that fruit-based drinks should attract 12 per cent GST.
Fruit-based fizzy drinks will continue drawing goods and services tax (GST) of 28 per cent along with 12 per cent compensation cess after a ruling by the Gujarat-based authority for advance ruling (AAR).
The authority did not agree with a petitioner’s that fruit-based drinks should attract 12 per cent GST. The ruling was on a petition by Mohammed Hasanbhai Kabalai, who appealed the AAR for relevant GST for his proposed ‘Apple Cola Fizzy’ and ‘Malt Cola Fizzy ‘ drinks.
The petitioner based his arguments on the Food Safety and Standards Authority of India (FSSAI) regulations. He argued that the drinks are not carbonated.
Kabalai relied on a Supreme Court ruling on the similar product to say that his products are not carbonated but are thermally processed with carbon dioxide (CO2) which helps in preserving the fruit juice concentrate. As such the products are ready to serve fruit beverages which should attract 12 per cent rate, he argued.