Recently, the GST Preliminary Ruling Authority (GST-AAR) dealt with the case Sirimiri Nutrition food products, a Bengaluru-based chikki producer, agreed that several of its chikkies, including new varieties of dried fruit chikki and spirulina chikki, would be subject to a 5% GST. These Chikkies strains have been categorized Chapter Category 17 as “Non-cocoa confectionery”.
However, when it came to “chocolate peanut chikki,” GSTAAR’s Karnataka Bank pointed out that this product contains cocoa powder and falls under Chapter 18, which covers chocolate and other food preparations containing cocoa. In this case, the tax is a higher 18%.
Harpreet Singh, Partner in Indirect Tax at KPMG-India, said: “Cooked or semi-cooked packaged foods consist of a variety of ingredients to cater to different consumer preferences. These can have different manufacturing processes, interchangeable names, multiple end-uses, etc. These aspects make the GST classification complex, prone to different interpretations and consequently lead to litigation.” ”
TOI has treated many such cases in the past. The Gujarat AAR In the case of Amul, it was assumed that flavored milk (milk with sugar and added flavors) would have a GST of 12%. However, in another case, the Gujarat AAR ruled that “lassi”, a fermented milk drink, was exempt from the GST. Or while a fruit pulp or fruit juice based tetra pack may incur GST as low as 12%, for carbonated beverages the base GST rate is 28% plus a compensation fee.
“There are many such cases. A reduced number of GST tags or a uniform tax rate for all foods, regardless of differences such as ingredients, consumption type, etc., would minimize GST disputes,” Singh adds.
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