Mumbai AAAR: Imposition of 28% GST Rate on Carbonated Grape Juice Appy Fizz

In the war of differentiating between soft drink (having tax rate 40%), Carbonated Beverage (having tax rate 28%), and Fruit Juice-based drinks(having tax rate 12%), Appy Fizz drinks have suffered a setback from the ruling of Appellate Authority for Advance Rulings (AAAR), Mumbai. Appy Fizz, a product by Parle Agro that was introduced in India in the year 2005, was previously labelled as a fruit juice-based company (had applicable GST rate of 12%).

Now AAAR, Mumbai has passed a ruling that has re-categorized Appy Fizz from being a fruit juice-based company to a ‘Carbonated beverage with fruit juice’. Now the GST tax applicable on Fizz shall be hiked from 12% to 28% as applicable to other Carbonated beverages.

However, the Parle Agro contended before the tribunal that their product “Appy Fizz” is a thermally processed fruit beverage that complies with para bearing number 2.3.10 of the FSSAI regulations that Authority for Advanced (AAR) Ruling had not taken into consideration. However AAAR, Mumbai upheld the ruling of the AAR, Mumbai.

Parle Agro also put forth the judgment of the honourable Supreme Court as a judicial precedent. The Honourable Supreme Court had given a finding that fruit juice-based drinks are not to be treated as ‘aerated branded soft drinks’ as they have a separate entry (classification). Nevertheless, the aforesaid tribunal did not find similar facts and circumstances. It contended that while Appy Fizz is a carbonated fruit beverage, it is not a fruit pulp or fruit juice-based drink.