Local beverage firms in the net for evading GST

downloadLocal beverage companies are facing the heat from authorities for allegedly not adding the required quantity of fruit juice into products and still claiming benefits of lower Goods and Services Tax (GST), according to a report by The Times of India.

Fruit-based beverages that have more than 10 percent fruit juice fall under the 12 percent GST slab. A fizzy drink without any fruit juice content, which are categorised as a sin goods, falls under the 40 percent GST slab.

According to the report, some local beverage companies have been adding less than 10 percent fruit juice content to their products, but are still getting the benefit of selling the product with lower GST of 12 percent.

Various beverage firms have been trying to add fruit juice content to their fizzy drinks. In 2014, Prime Minister Narendra Modi had insisted that soft drink companies should include 5 percent fruit juices produced by the country’s farmers.

Coca-Cola, the world’s largest beverage maker, is expected to soon introduce fruit juice flavours in its main line of aerated drinks like Sprite, Limca and Fanta.

However, according to the Food Safety and Standard Authority of India (FSSAI) norms set in 2016, beverages with fruit content between 5 percent (2.5 percent in case of lime and lemon drinks) and 10 percent, should be categorised as carbonated beverages with fruit juice.

The report cities tax authorities as saying that the some soft drink players were misinterpreting the definition of “carbonated fruit drinks” to place their products under the 12 percent GST slab.


Source: Moneycontrol

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