Thursday, July 3, 2025

Mangoes, Misinterpretations & the Law: Gujarat HC serves a tangy verdict on GST!

        The Gujarat High Court recently delivered a significant verdict regarding the Goods and Services Tax (GST) applicable to mango pulp. This decision brings much-needed clarity for businesses in the food processing industry, particularly those dealing with mango-derived products. 

Here's a breakdown of the key aspects of the case and the court's ruling:

The Dispute:

  • A supplier, Harshad Mango Products , argued that mango pulp should be taxed at a 5% GST rate, claiming it was derived from sliced and dried mangoes which attract the concessional 5% rate.
  • The tax department, however, asserted that mango pulp falls under the category of "mangoes other than sliced and dried" and is subject to a 12% GST rate, citing relevant notifications and a clarification circular. 

The Gujarat High Court's Verdict (Harshad Mango Products Pvt. Ltd vs Union Of India on 23 April, 2025):

  • The High Court upheld the department's position, ruling that mango pulp is taxable at 12% GST.
  • The court clarified that mango pulp is neither fresh mango (which is GST exempt) nor sliced and dried mangoes.
  • It emphasized that the 12% rate has been in effect since the introduction of GST in July 2017, and the relevant notifications and circulars merely served as clarifications, not retrospective amendments.
  • The court also rejected the revenue officials' contention that mango pulp should attract an 18% GST under the residual entry for items not specifically categorized. 

Key Legal Observations:

  • The court referred to its previous decision in Vimal Agro Products Pvt. Ltd. v. Union of India on 24 April, 2024, where a similar issue regarding mango pulp GST was addressed.
  • It noted that the Harmonized System of Nomenclature (HSN) Chapter 08.04, which covers edible fruits and nuts, only refers to fresh or dried mangoes, not pulp.
  • Entry 30A of Schedule I, which offers a 5% rate, specifically applies only to sliced and dried mangoes.
  • The court confirmed that Circular 179/11/2022 and Notification 6/2022 were clarificatory in nature, reinforcing the existing 12% GST rate on mango pulp. 

Implications for Businesses:

  • Companies involved in the production and sale of mango pulp need to ensure they have been consistently applying the 12% GST rate since July 2017.
  • Businesses that applied lower rates may face back tax assessments and potential penalties.
  • This ruling emphasizes the importance of correctly classifying products and understanding the applicable GST rates to avoid disputes with tax authorities. 

        In essence, the Gujarat High Court's "tangy verdict" affirms that mango pulp falls under the 12% GST category, putting an end to past interpretations and providing a clear framework for tax compliance in the mango processing industry.

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