- The rate structure of goods under GST is based on the Customs Tariff Act, which is divided into 21 sections and 98 chapters.
- Chapter 22 covers beverages, including lemonade and fruit juice-based drinks.
- Non-carbonated lemonade falls under a higher GST rate compared to lemon juice-based drinks.
- The HSN code of the product must be determined correctly to avoid discrepancies in GST rates.
- While the Customs Tariff and Explanatory Notes do not offer clarity on the difference between the two types of beverages, FSSAI regulations state that a fruit beverage must have a minimum of 5% fruit juice content to be classified as a fruit juice-based drink.
- The same principle has been upheld by the Larger Bench of Allahabad Tribunal.
- The correct classification of products is crucial in determining the correct GST rates, and the product’s name, nature, features, and description on labels should be considered.
Source CA Arushi Jain
