Supreme Court Holds Rooh Afza Taxable as Fruit Drink, Says Marketing Labels Not Decisive

The Supreme Court held that Rooh Afza is classifiable as a fruit drink under the UPVAT Act and taxable at the concessional rate of 4%, rejecting the State’s decision to tax it at 12.5% under a residuary entry.

The dispute arose after tax authorities treated the product as a “non-fruit syrup/sharbat” based on its regulatory description.

The Court observed that marketing or licensing labels do not determine tax classification. It held that the product’s composition, essential character, and commercial identity must guide classification.

Allowing the appeal, the Court set aside the Allahabad HC judgments.

[M/s Hamdard (Wakf) Laboratories v. Commissioner, Commercial Tax, U.P.]