Marketing Labels Not Determinative for Tax Classification, Rooh Afza Held Taxable as Fruit Drink: Supreme Court of India

The Supreme Court of India has clarified that marketing labels and licensing descriptions cannot dictate a product’s tax classification. In a judgment delivered on 25 February 2026, the Court held that Rooh Afza, a fruit-based beverage preparation intended for dilution, qualifies as a “fruit drink” under Entry 103, Schedule II, Part A of the UPVAT Act, attracting a concessional VAT rate of 4%, despite being marketed as a “Sharbat,” which…