The Karnataka Appellate Tribunal grants PepsiCo India relief in a classification matter pertaining to the erstwhile Value Added Tax (“VAT”) regime. The VAT authorities at lower levels had classified Nimbooz, Slice and Tropicana under the “residuary entry” leviable to tax at the higher rate of 14%/ 14.5% (as applicable during the relevant period), on the ground that the said products are “fruit beverages” as per the labels affixed on such products, and thus cannot claim lower rate of VAT at 4%/ 5.5% (as applicable during the relevant period) available for “fruit drinks and fruit juices” under Entry No. 3 of the Third Schedule to the Karnataka Value Added Tax Act, 2003 (“KVAT Act”).
The Hon’ble Tribunal allowed the Appeal filed by PepsiCo in this regard and held that there is no difference between the terms “drink” and “beverage” in relation to Entry No. 3 of the Third Schedule to the KVAT Act. Additionally, on perusal of the ingredients and manufacturing process, it was held that Nimbooz, Slice and Tropicana are “fruit drinks”. Further, reliance was also placed on the view taken by Hon’ble Punjab and Haryana High Court in Saluja and Company vs. State of Haryana & Ors [(2021) 92 GSTR 251] and the Larger Bench of Hon’ble CESTAT, Allahabad in Brindavan Beverages (P) Ltd. v. Commissioner, Customs, Central Excise & Services TAX [2019 (29) GSTL 418 (Tri.-LB)], wherein Nimbooz and Slice were held to be fruit drinks or fruit juice-based drinks. The Hon’ble Tribunal also referred to the license granted under the Food Safety and Standards Act, 2006 to authorize the Appellant to manufacture fruit drink/ ready to serve fruit beverages.
The JSA team was led by Manish Mishra, Partner and Head of Practice, Indirect Tax, with support from Ankur Mittal, Counsel; and Sameer Samal, Associate
Manish has more than 23 years of experience in Indirect taxation across Industry, Consulting and law firms.