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Although the salted popcorn vs caramel popcorn debate has led to a flood of memes on social media, it is just one of the many controversies reminding taxpayers of the complexity of GST.
Recall the Roti vs Paratha debate, which was fought for almost 20 months between Vadilal Industries Limited and Gujarat’s Authority for Advance Ruling. Ultimately it was decided that rotis would be taxed at 5 per cent, while packed/frozen parathas would attract 18 per cent GST.
Similarly, is the popular Parachute coconut oil classified as an edible oil (attracting 5% GST) or a haircare product (attracting 18% GST)? Believe it or not, the judiciary considered this question for more than 15 years before giving its decision to classify parachute oil as edible oil.
Here’s another pickle for you – is Nestle KitKat a chocolate or a biscuit?
“…Thus while all chocolate must necessarily contain cocoa, it is not every cocoa product or preparation that is chocolate,” the court said in ruling that KitKat is classified as a biscuit, meaning Nestlé’s There is less tax burden.
Dabur India was also embroiled in a tax dispute over the classification of red toothpaste as tooth powder or medicinal drug. Tax authorities classified it as tooth powder.
Currently, the GST Council has listed four slabs – 5%, 12%, 18% and 28%.
Mohan said the objective of the single tax regime was to reduce the number of rates to two or at most three, with the third applicable to very specific goods or ‘sin goods’ such as tobacco and alcohol.
“For a progressive tax regime, the two rates should be within the 5-8% and 6-10% range so that the average GST payment does not exceed 10 per cent,” he said.
