Recently, the GST-Authority for Advance Rulings (GST-AAR), within the case Sirimiri Nutrition Food Products, a Bengaluru-based chikki producer agreed that a number of in their chikkies, together with the brand new forms of dry fruit chikki and spirulina chikki will likely be matter to five% GST. These forms of chikkies have been categorised underneath bankruptcy heading 17 as ‘sugar confectionery no longer containing cocoa’.
However, when it got here to ‘chocolate-peanut chikki’, the Karnataka bench of the GSTAAR identified that this product comprises cocoa powder and is roofed underneath Chapter 18, which covers chocolate and different meals arrangements containing cocoa. The tax on this case is a better 18%.
Harpreet Singh, oblique tax spouse at KPMG-India, stated: “Cooked or semi-cooked packet food items comprise a variety of ingredients to suit varying tastes of consumers, these may have different processes of manufacture, interchangeable names, multipleend-uses, etc. These aspects make GST classification complex, prone to varied interpretations and consequently result in litigation. ,
TOI has in the past covered many such instances. The Gujarat AAR in the case of Amul, had held that flavored milk (milk with sugar and added flavours) would attract 12% GST. But, in another case, the Gujarat AAR held that ‘lassi’, a fermented milk drink, would be exempt from GST. Or while a fruit-pulp or fruit-juice based tetra pack could entail a GST of just 12%, if it’s fizzywatch out the basic GST rate would be 28% topped with a compensation cess.
“There are many such instances. A reduced number of GST slabs or one rate on all food products, irrespective of differences such as in ingredients, method of consumption, etc, would minimize GST disputes,” provides Singh.