GAAAR Rules 18 Per Cent GST Applicable On Instant Flour Mixes For Khaman, Dosa, Idli

Kitchen Express Overseas argued that its products were not ‘ready to eat’, and should be termed ‘ready to cook’. The firm urged for its mixes to be treated similar to sattu

Instant flour mixes, such as idli, dosa, khaman flour will now attract a Goods And Services Tax (GST) at 18 per cent, the Gujarat Appellate Authority for Advance Ruling (GAAAR) said. The authority said that these mixes cannot be classified as chhatua or sattu in response to a plea from the Kitchen Express Overseas Ltd.

The Gujarat-based firm appealed to GAAAR calling for a 5 per cent GST on its seven ‘instant flour mixes’. The firm argued that these products were not ‘ready to eat’, rather required customers to undertake some cooking procedures. The company said its products should be termed ‘ready to cook’ and should be treated similar to sattu, reported PTI.

Notably, the firm sells flour mixes of khaman, gota, dalwada, dahi wada, dhokla, dosa, and idli in powder form. However, the GAAAR denied the plea and said that the ingredients used in making these mixes are not a part of the relevant GST rules, unlike sattu, where each input is particularly mentioned.

As a per a circular by the CBIC, the ingredients mixed to make sattu are specifically included in the GST rules and therefore attract a tax rate of 5 per cent. However, this rule does not apply in this particular case as the products being sold by the appellant include spices and other inputs, unlike sattu or chhatua, the authority said.

The authority denied the idea that the products requiring certain preparations doesn’t make them eligible for the reduced tax rate.

Commenting on the issue, Abhishek Jain, Indirect Tax Head and Partner, KPMG, noted, “Classification disputes are among the most common areas of litigation under the GST. Despite the issuance of circulars, differing interpretations of the clarifications provided in these circulars have often elevated the challenges.”