Tropicana UK Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 23 July 1993 |
| Date | 23 July 1993 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
Ali Baba Tex Ltd; C & E Commrs v VAT[1992] BVC 93
McNicol & Anor v Pinch ELR[1906] 2 KB 352
Savoy Hotel Ltd; C & E Commrs v UNK[1966] 2 All ER 299
Sunjuice Ltd VAT(LON/92/73) No. 8902; [1993] BVC 1323
Zero-rating - Food of a kind used for human consumption - Orange juice - Whether product excepted item as being manufactured beverage - section 16 schedule 5 group 1Value Added Tax Act 1983, s. 16 and Sch. 5, Grp. 1, item 1 and excepted schedule 5 group 1item 4.
The issue was whether orange juice which had been subjected to light pasteurisation and then chilled was a "manufactured beverage" so as to bring it within excepted schedule 5 group 1item 4 of Grp. 1 of Sch. 5 of the Value Added Tax Act 1983 and thus preclude it from zero-rating as being food of a kind used for human consumption under schedule 5 group 1item 1.
The appellant sold in the UK orange juice extracted from fruit in Florida which was subject to light pasteurisation and then packed and shipped in chilled conditions to the UK where it was sold from chilled cabinets in most major supermarket chains.
Mature oranges were harvested by hand in Florida and, within 24 hours, processed. This involved the juice being immediately chilled to zero degrees Celsius and then subjected to swift heating to a predetermined temperature for a predetermined time, followed by swift cooling to a temperature just above freezing point. The object of this operation was to maintain the quality of the juice and to permit the product to have a shelf life of 70 days, compared with the normal shelf life of such juice of up to 25 days.
The commissioners ruled that the resulting product fell within excepted item 4 which took "…manufactured beverages, including fruit juices…" out of entitlement to zero-rating. They claimed that although neither pasteurisation nor refrigeration produced a new product nevertheless pasteurisation was a process of manufacture so that the juices in question were "manufactured fruit juices" and thus standard-rated. The issue turned on the narrow point of whether the pasteurisation itself caused the fruit juice to be manufactured, since it was accepted that the process of harvesting, squeezing, refrigerating, packaging and so on was not such a process.
The appellant contended that the flash pasteurisation did not create any new product but was designed to keep the product in its pristine...
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...unchanged until 1993 when steps were taken to amend Excepted item 4 so as to reverse the decision of the VAT tribunal in Tropicana UK Ltd [1994] BVC 622. In Tropicana the tribunal had found that pasteurised fruit juice was not a “manufactured” beverage. The word “manufactured” was therefore......