Order Date – 14 September 2022

Facts –

• The Applicant, M/s. United Breweries Limited, is primarily engaged in manufacturing (brewing), bottling, marketing and sale of alcoholic and non-alcoholic beverages. The applicant launched a non-alcoholic malt drink called ‘Kingfisher Radler’, in 2018, as an alternative to alcoholic beer and sweetened aerated waters and classified the said product under tariff heading 2209 9100, as non-alcoholic beer.
• The product ‘Kingfisher Radler’ is akin to a beer, albeit without containing alcohol. The product replicates the ingredients,  taste, feel and packaging of beer.
• Applicant submitted that the product is manufactured in a brewery and bottled much like beer in bottles and cans. It is not packaged in PET bottles. The product being a non-alcoholic malt is classified under tariff entry 2202 9100 which covers ‘non-alcoholic beer’ attracting a GST rate of 18%.
• Recently, vide notification No. 8/202 1-CT (Rate) and Notification No. 1/202 1-CC (Rate) both dated 30.09.2021(‘the amendment Notification’) the GST rate has been increased to 28% and compensation cess at 12% has been levied w.e.f. 01.10.2021, on: “Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit juice” under tariff Heading 2022.

Issues –

• Whether the non-alcoholic malt drink “Kingfisher Radler’ is covered as “Carbonated beverages of fruit drink or carbonated beverages with fruit juice” of chapter heading 2202, under Entry 12B of Notification No.1/2017 dated 28.06.2017 (as introduced by Notification No.8/ 2011 - Central Tax (Rate) dated 30.09.2021)?

Order –

• The authorities observed it is an admitted fact in the instant case that the impugned product does not contain any alcoholic strength by volume, as it is not fermented and hence the question of reducing the said strength does not arise. Hence the impugned product is neither a beer initially nor its alcoholic strength is reduced to 0.5% vol. Thus the impugned product does not qualify to be a non-alcoholic beer, but it is a non-alcoholic beverage.
• It could be inferred that the predominant component of the product is mixed fruit juice content - the contention of the applicant that the product is marketed and understood in common trade parlance as 'non-alcoholic beer' and on this basis alone it deserves to be classified under tariff item 2201 91 00 is not acceptable.
• The impugned product is a mixture of Barley malt, sugar, mixed fruit juice, hops, lemon extract, carbon dioxide, water, flavour & other additives and Black carrot juice, amongst which the predominant is mixed fruit juice, in all variants of the product. Thus the product needs to be classified on the basis of predominant material/substance in terms of Rule 2(b) of General Interpretation Rules. Further all the variants of the product are admittedly carbonated and hence they are nothing but carbonated beverages - all the variants merit classification as carbonated beverages of fruit drink, covered under tariff heading 2202 99 90. 
• Thus, the product “Kingfisher Radler’ has different variants and all the variants merit classification as carbonated beverages of fruit drink, all covered under tariff heading 2202 99 90. Accordingly the product attracts GST @ 28% along with applicable cess of 12% in terms of SI.No.12B of Schedule IV to the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, effective from 01.10.2021.