Supreme Court Sweetens Deal for Rooh Afza, Citing Fruit Connection

New Delhi: In a significant verdict that will likely bring a sigh of relief to beverage manufacturers and consumers alike, the Supreme Court has ruled that the iconic summer cooler, Rooh Afza, will attract a lower 4% Value Added Tax (VAT) under the Uttar Pradesh VAT Act, classifying it as a "fruit drink." The decision overturns previous higher tax assessments, potentially making the popular concentrate more affordable in the state.

The apex court's judgment centered on a nuanced interpretation of what constitutes a fruit-based beverage for taxation purposes. While Rooh Afza is renowned for its unique blend of herbs, fruits, and floral extracts, its classification under various tax regimes has often been a point of contention. Manufacturers have long argued that the presence of fruit essences and extracts should qualify it for lower tax rates typically applied to fruit juices and fruit-based drinks, rather than the higher rates levied on aerated waters or general soft drinks.

Sources familiar with the legal arguments suggest that Hamdard Laboratories (India), the makers of Rooh Afza, meticulously presented the composition of their product, highlighting ingredients derived from fruits like orange and pineapple, among others. The court seemingly accepted the argument that these fruit components were sufficient to warrant a classification akin to other fruit-based beverages, despite Rooh Afza being a concentrate that requires dilution.

Legal experts believe this ruling could set a precedent for other similar concentrate-based drinks that contain fruit extracts, potentially leading to a re-evaluation of their tax classifications across different states. "This judgment underscores the importance of precise definitions in tax statutes," commented a tax lawyer. "It acknowledges the inherent fruit content in products like Rooh Afza, moving away from a rigid interpretation that might have overlooked the actual composition and consumer use."

For consumers in Uttar Pradesh, the decision is expected to translate into a slightly reduced price for their favorite summer refreshment. For Hamdard, it's a win that not only provides tax relief but also reaffirms Rooh Afza's long-standing positioning as a wholesome and refreshing drink.

The Supreme Court's detailed reasoning in the written order is keenly awaited, as it will provide further clarity on the criteria used to classify such beverages under tax laws.