2026-VIL-199-AAR
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SGST Advance Ruling Authority

GST - Classification of non-alcoholic fermented fruit beverage - Chapter 22 of the Customs Tariff - Applicant manufactured a beverage from black grapes, water, sugar and yeast through fermentation and sold it as non-alcoholic red wine. It had been paying tax at the higher rate. It sought classification as a fruit pulp or fruit juice based drink, as its competitors were doing. It produced an old government laboratory certificate that showed alcohol content, and a fresh report from a private laboratory - Whether the beverage is classifiable as a fruit pulp or fruit juice based drink under HSN 2202 9920, and the correct HSN code and rate of tax for the beverage - HELD - Yeast converts the sugars of the fruit into alcohol, which distinguishes wine from fruit juice. The use of yeast in fermentation, coupled with the sale of the product as non-alcoholic red wine, shows that it cannot be termed as fruit juice. Wine is defined in the Food Safety and Standards (Alcoholic Beverages) Regulations as the beverage produced by alcoholic fermentation of the juice of grapes. The product is therefore a fermented beverage and not a fruit pulp or fruit juice based drink - Chapter Note 3 to Chapter 22 treats a beverage as non-alcoholic only if its alcoholic strength by volume does not exceed the prescribed limit. The old government laboratory certificate was more than a decade old and showed alcohol content. The fresh report was issued by a private laboratory and not by a certified government laboratory authorised for such testing. The alcohol content cannot be determined without valid documentary evidence - In the absence of valid documentary proof, the correct HSN code and the rate of tax cannot be determined – Ordered accordingly
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