Glaxosmithkline Services Unlimited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 3 September 2010
Neutral citation: [2010] UKFTT 418 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
GSK appealed HMRC's decision that ready-to-drink Lucozade Sport and its powder Drink Mix are standard-rated as "beverages" or products for preparing beverages under Group 1, Schedule 8 VATA 1994. The First-tier Tribunal applied ordinary‑usage criteria (drawing on Bioconcepts) and factual evidence on composition, marketing and consumption, and held the liquid is a beverage and the powder is for preparation of a beverage. The Tribunal rejected the contention that nutritional/functional attributes re‑characterised the products as zero‑rated liquid/functional foods, dismissed the appeal and awarded costs to HMRC.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The decision treats whether a product is a "beverage" as a question of ordinary usage and fact, to be assessed by features such as thirst‑quenching, rehydration, fortification, pleasure and overall use (the Bioconcepts criteria); functional or nutritional claims do not displace that ordinary‑usage classification unless there is evidence that consumption is predominantly for the nutritional/functional purpose.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal noted (obiter) that European foodstuff classifications do not assist the domestic question of what is a "beverage" for Schedule 8 purposes, and that HMRC's 2002 Public Notice criteria for sports products are not binding; packaging, marketing and point‑of‑sale placement are relevant indicators of how a product is marketed.