Page 118 - GSTL_ 28th May 2020_Vol 36_Part 4

564 GST LAW TIMES [ Vol. 36
es, 1990, Van Nostrand Reinhold, New York, wherein it is
stated that the most significant feature of a fruit beverage is
not its fruit content but the function for which it is designed
and marketed. The fruit is often a dominant ingredient
providing its overall character to the drink which cannot be
achieved in any other way.
o Sub-heading 2202 10 covers waters, including aerated waters,
which are either sweetened or flavoured or both. Thus, a fla-
voured water-based beverage is covered by sub-heading No.
2202 10. Flavour is a trace (extremely small amount of a com-
ponent) of a particular odour or taste in a food substance.
Thus flavoured waters contemplated under sub-heading No.
2202 10 are beverages or preparations which contain flavour-
ing agents, which impart the sensation of a particular taste or
odour. A fruit juice based drink not only attributes the essen-
tial character of the beverage, but also functions more than as
a mere agent imparting the sense of taste.
o Reliance is also placed on the US Customs Ruling No.
N122815 in the matter of Ms. Michele Peplinski Parker’s Or-
ganic Fruit Juice and stated that a beverage could be a fruit
juice based drink or a flavoured water but the classification is
determined by the presence of the fruit juice to an extent that
it attributes the essential character to the beverage, not mere-
ly as a flavouring agent. It is the dominant nature of the
product which determines the classification under the sub-
heading No. 2202 10 or 2202 99.
o As per FSSAI, flavouring agents can be natural, nature-
identical or synthetic substances. Fruit juice or essence can be
said to be a natural flavouring agent. In that sense, any bev-
erage made of fruit juice flavour would be a flavoured water
and would be liable for classification under sub-heading No.
2202.10. However, a closer examination of the scheme of clas-
sification under Chapter Heading No. 2202 would reveal that
such an interpretation is not what is contemplated in Chapter
Heading 2202 and that flavoured water is not the same as a
fruit juice-based drink.
o If Tariff Item 2202 10 90 is treated to include an orange juice
based drink, it would mean that any fruit juice based drink
would be susceptible to classification under Tariff Item No.
2202 10 90, as being flavoured water, irrespective of the com-
position, nature and common understanding of the market
regarding the nature of the product. However, this is evident-
ly not the intention of the scheme of classification under
Chapter Heading No. 2202, which provides a separate entry
for classification of fruit juice based drinks.
o Sub-heading 2202 10 would cover only those beverages
which are prepared with flavours and the beverages which
are prepared from fruit juice would be classifiable under Tar-
iff Item 2202 99 20.

GST LAW TIMES  28th May 2020  118