Idli may taste the same, but tax rates depend on the type of mix
The AAR held that ready-to-cook products such as dosai mixes, idli mix, sold in the name of brand name are taxable at 18% GST.
While idli batter attracts 5% GST, idli mix in the powdered form will attract 18% tax, the Authority for Advance Ruling (AAR) has ruled.
The ruling came on a plea by Krishna Bhavan Foods and Sweets before the Tamil Nadu bench of AAR. The petition sought a ruling on the Goods and Services Tax (GST) rate applicable on 49 products, including bajra, jowar, ragi and multigrain porridge mix, sold under a brand name, according to a report in the Mint.
“The dosai mixes and idli mixes are packed and sold as mixes which are to be mixed with water/boiled water/curd to make it as batter and the product sold is a powder and not batter. … All the 49 products for which the ruling is sought is classifiable under CTH 2106 and the applicable rate is 9% CGST and 9% SGST,” the AAR ruled.
“The AAR held that ready-to-cook products such as dosai mixes, idli mix, sold in the name of brand name are taxable at 18% GST, even though batter for the same is taxable at 5%,” AMRG & Associates, senior partner Rajat Mohan told the media.
“This kind of legal interpretation by the authority for the advance ruling would lead to an inverted duty structure for the entire industry, posing them to file tax refunds on a regular basis,” Mohan added.
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