PepsiCo Withdraws GST Advance Ruling Request on Sting Energy Drink
The Maharashtra tax authority allowed PepsiCo to withdraw its GST advance ruling application for Sting energy drink without deciding its tax rate.
- Ruling
- NO.GST-ARA-40/2017-18/B-47 dated 13.06.2018
- Dated
- 13 Jun 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- PepsiCo asked if Sting caffeinated beverage should attract 18% or 28% GST.
- PepsiCo later requested to withdraw its application unconditionally.
- The Maharashtra Authority for Advance Ruling accepted the withdrawal request.
- No decision was given on the classification or tax rate of energy drinks.
In short
PepsiCo India Holdings Pvt Ltd asked the Maharashtra Authority for Advance Ruling in order GST-ARA- 40/2017-18/B- 47 Mumbai about the GST rate for its caffeinated drink Sting. The company wanted to know if the energy drink should be classified under tariff item 2202 91 00 at 18% GST or sub-heading 2202 10 at 28% GST. Before the tax authority could decide on the tax rate, PepsiCo asked to withdraw the request.
What has changed
How it worked before
Before this order, businesses were unsure whether a GST advance ruling application could be voluntarily withdrawn before the authority gave a decision on the merits.
What has changed
The Maharashtra tax authority allowed the company to withdraw its application unconditionally under Section 98 of the Central Goods and Services Tax Act, 2017. The authority closed the case without giving any decision on the correct GST rate or classification for caffeinated beverages.
Who this affects
Businesses selling caffeinated beverages or drinks, and companies considering withdrawing a pending GST advance ruling request.
An example
A beverage company launches a new caffeinated energy drink and files an application for a GST advance ruling to confirm its tax rate. Before the tax authority issues a decision, the company decides to alter its product strategy and submits a written request to drop the case. The tax authority accepts the request and permits withdrawal without ruling on the GST rate.
What you should do
Do not use this order to determine the GST rate for energy drinks, as no decision on taxability was made. Remember that advance rulings apply only to the specific business that asked and its own tax office. If you need clarity on your product's tax rate, consult a tax advisor or file a fresh application.
If you do nothing
If a business assumes this order sets a low GST rate for caffeinated energy drinks, it risks choosing the wrong tax rate. Tax officers can demand unpaid GST along with statutory interest and penalties if a product is under-taxed. Since no tax ruling was issued here, this order provides no protection during a tax audit.
The terms explained
- Advance Ruling
- A formal decision issued by tax authorities to a specific business regarding tax rates or rules applicable to their goods or services.
- Tariff Item
- A unique numerical classification code used in GST rules to identify products and fix their tax rates.
- Integrated Tax
- The GST collected on interstate sales of goods and services across state borders.
The ruling in detail
Authority for Advance Ruling
PepsiCo (India) Holdings Pvt Ltd
NO.GST-ARA-40/2017-18/B-47 dated 13.06.2018 · Maharashtra
Questions before the authority
- Whether the product Sting - Caffeinated Beverage (Energy Drink) containing 72 mg per serve (250 ml) of caffeine is classifiable under Tariff Item 2202 91 00 (Sl No. 24A of Schedule - III) as "Other Non-Alcoholic Beverage" or under Sub-heading 2202 10 (Sl. No. 12 of Schedule-IV) as "All goods [including aerated waters], containing added sugar or other sweetening matter or flavoured" of the rate schedule of Notification No. 01/2017 - integrated Tax (Rate) dated 28.06.2017, read with the Corrigendum dated 27.07.2017.
Facts
The applicant sought an advance ruling regarding the GST classification and applicable rate for its caffeinated energy drink 'Sting'. Prior to any determination on the merits, the applicant's advocate filed a written request dated 17.05.2018 seeking permission to withdraw the application based on client instructions. During the preliminary hearing on 05.06.2018, the advocate reiterated the request for withdrawal.
Ruling
The Authority for Advance Ruling allowed the applicant's request to withdraw the application voluntarily. The application was disposed of as **withdrawn unconditionally** without examining the merits or underlying facts of the classification issue.
Reasoning
The applicant's authorized representative submitted a written letter dated 17.05.2018 and orally requested during the hearing on 05.06.2018 that the advance ruling application be withdrawn. Accepting the voluntary and unconditional request of the applicant, the Authority permitted the withdrawal without expressing any opinion on the merits under Section 98 of the CGST Act, 2017 and MGST Act, 2017.
Provisions relied on
- Section 98 of the Central Goods and Services Tax Act, 2017
- Section 98 of the Maharashtra Goods and Services Tax Act, 2017
- Notification No. 01/2017-Integrated Tax (Rate) dated 28.06.2017
For the practitioner
This order is purely procedural and confirms that an applicant may seek **unconditional withdrawal** of an advance ruling application prior to a decision on merits. It holds no precedent value regarding the classification or taxability of energy drinks or caffeinated beverages.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/mah_aar_40_2017-18_b-47_13.06.2018_pepsiihpl.pdf
Legibility of the scan, as read: high.
Prepared 19-10-2026.
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