Softy ice cream mix not dairy produce, attracts 18% GST: Authority of Advance Ruling 

Introduction

In a significant move for India’s food industry, the Authority of Advance Ruling (AAR) has ruled that softy ice-cream mix is classified as a non-dairy product and therefore attracts an 18% Goods and Services Tax (GST). According to GST law, food products that require further processing for consumption are taxed at this rate. This decision is expected to have substantial implications for manufacturers, distributors, and pricing across the market.

AAR’s Decision and Its Basis
The ruling is based on GST guidelines that categorize food items intended for further processing under the 18% tax bracket. Although softy ice-cream mix has previously been perceived as a dairy-based product, AAR clarified that it is a non-dairy preparation. This decision aligns with the government’s approach to applying distinct tax rates for processed and unprocessed foods, ensuring clarity for manufacturers and consistency in GST application.

Impact on the Food Industry
Manufacturers and distributors dealing in softy ice-cream mix will feel the immediate effects of the new tax rate. The higher GST means increased costs, which are likely to be transferred to consumers. Additionally, companies may need to update their product categorization and labeling to reflect this non-dairy classification accurately. For some, this rulinng may even prompt a reevaluation of product recipes and ingredients to manage costs more effectively under the new tax structure.

Potential Price Changes for Consumers
With this tax adjustment, consumers may see an uptick in prices for softy ice-creams made from the dried mix. Since many food and beverage chains rely on such mixes for their products, the higher cost might also impact popular ice-cream and dessert offerings across restaurant s and outlets. This tax reclassification could prompt increased consumer awareness around the ingredients in their food and how different classifications affect pricing.

Conclusion
The AAR’s decision to classify softy ice-cream mix as a non-dairy product subject to 18% GST represents a major shift in product classification. This change may influence manufacturing strategies, consumer prices, and even the broader food processing industry. Staying updated on these regulatory changes is essential for industry stakeholders and consumers alike, as tax classifications continue to evolve in line with product innovation.

Hashtags
#GSTUpdate #FoodIndustry #NonDairy #SoftyIceCreamMix #AuthorityOfAdvanceRuling #Taxation #India