AAR-TN has drawn a distinction between dry branded mixes and wet batter
Branded mixes for dosa, idli, tiffin, health and porridge will attract Goods & Services Tax (GST) at the rate of 18 per cent, Tamil Nadu’s Authority for Advance Rulings (AAR) has said.
The applicant stated that they are making ready-to-cook foods and the ingredients are added by mere blending/mixing some portion of salt, rice and rice flour. These mixes are same like the mixture of flour of vegetable plants. They also informed that they registered for trade mark in 2018 which is still pending.
The applicant referred to an order by Gujarat AAR which said 5 per cent GST will be levied on mix flour for khaman, gota, handwa, dahi vada, dal vada, meduvada, pudla, moong bhajiya, chorafali, bhajiya, dhokla, idli and dosa. For chutney powder, it would be 18 per cent while for mixed supply of Bhajiya mix and chutney powder will attract 5 per cent
The applicant also relied upon ruling by Tamil Nadu AAR in the matter of Britannia Industries pegging GST at 12 per cent on flavoured milk powder. They submitted that post the introduction of GST, some of the manufactures of similar products are charging GST at the rate of 5 per cent and some at 18 per cent.
‘Food in power form’
The AAR said that the products in question are all food preparations in the form of powder.
“The dosai mixes and idli mixes are packed and sold as mixes which are to be mixed with water/boiied water/curd to make it as batter and the product sold is a powder and not batter,” it said while making it clear that these will attract GST at the rate of 18 per cent and not 5 per cent.
Commenting on the ruling, Rajat Mohan, Senior Partner with AMRG said that the authority has created a divide between ready-to-cook mixes, and the wet batter.
“AAR rulings have a solid persuasive value for the entire industry, thus making branded ready-to-cook products dearer compared to other alternatives,” he said.