Supreme Court of India classifies Rooh Afza as a fruit drink
Change
The Supreme Court of India held that Hamdard (Wakf) Laboratories' Sharbat Rooh Afza falls under Uttar Pradesh's fruit drink/processed fruit product category and is therefore liable to a 4% value-added tax rather than the 12.5% residuary rate.
Why it matters
The ruling prevents state tax authorities from reclassifying the beverage into a higher residuary tax bracket based on regulatory or licensing labels. It establishes that illustrative entries for fruit products do not impose a quantitative fruit-content threshold, limiting future assessments that seek higher VAT on similar fruit-based beverages.
Implications
- • Uttar Pradesh commercial tax department's VAT assessment units must revise or halt assessments treating Sharbat Rooh Afza as a residuary entry and apply the 4% rate where consistent with the judgment.
- • Hamdard (Wakf) Laboratories' tax and compliance team should amend VAT filings to reflect the 4% rate and pursue refunds or adjustments for any past overpayments under the 12.5% rate.
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Source
Topics
Policy & Regulation Court Rulings Regulatory Actions Compliance Food & Beverages