The Bombay High Court is set to decide whether donuts and cakes should be classified as part of restaurant services or as separate bakery products under the Goods and Services Tax (GST) framework. [Himesh Foods v. Union of India].A bench of Justices BP Colabawalla and Firdosh Pooniwalla was hearing a plea by Mad Over Donuts (Himesh Foods) regarding the issuance of a show-cause notice (SCN) by the Directorate General of GST Intelligence (DGGI).The Court recorded the statement from the DGGI that no coercive recovery action would be taken against the petitioner during the pendency of the case. It clarified that the petitioner could move court if any recovery notice is issued. "The Petitioner is always free to approach the Court seeking a stay, if any recovery notice is issued. We will at that time consider the prayer for any interim relief," the order read..The DGGI demanded approximately ₹100 crore in tax dues from Mad Over Donuts and other donut and bakery chains seeking 18% GST on sale of donuts and other bakery items.The key issue at hand is whether the supply of donuts, which are sold both for consumption on-site and for takeaway, should be classified under restaurant services, taxed at 5%, or as a bakery product, which could attract a tax upto 18% under GST..Counsel for the petitioner argued that the supply of food and edible items qualifies as a composite supply of services under the Central Goods and Services Tax (CGST) Act. Rastogi pointed to GST rate notifications that explicitly include food supplied at restaurants, eating joints, messes and canteens, whether consumed on the premises or taken away.He also referred to a government-issued circular that affirms takeaway services fall under restaurant services and should be taxed at 5%..He also pointed out procedural issues related to the issuance of a centralised SCN by the DGGI, covering multiple territorial jurisdictions. He raised concerns about the multiplicity of proceedings, suggesting that separate notices should be issued for each GST registration, rather than consolidating them into a single notice. This, he argued, would ensure greater clarity and fairness in the tax process..Counsel for DGGI, assured the Court that no recovery notice had been issued against Mad Over Donuts so far.It was stated that the petitioner's concern regarding recovery action was unfounded, which the Court accepted as an undertaking.The case is scheduled for further hearings on March 24, with the respondent tax authorities required to file their affidavit by March 17..Advocates Abhishek Rastogi, Aarya More, Pooja Rastogi and Meenal Songire appeared for the petitioner.Advocates Jitendra Mishra and Sangeeta Yadav appeared for the Additional Director-DGGI and the Assistant Commissioner- DGGI.Advocates Satyaprakash Sharma and Suman Kumar Das represented the Union of India..[Read Order]
The Bombay High Court is set to decide whether donuts and cakes should be classified as part of restaurant services or as separate bakery products under the Goods and Services Tax (GST) framework. [Himesh Foods v. Union of India].A bench of Justices BP Colabawalla and Firdosh Pooniwalla was hearing a plea by Mad Over Donuts (Himesh Foods) regarding the issuance of a show-cause notice (SCN) by the Directorate General of GST Intelligence (DGGI).The Court recorded the statement from the DGGI that no coercive recovery action would be taken against the petitioner during the pendency of the case. It clarified that the petitioner could move court if any recovery notice is issued. "The Petitioner is always free to approach the Court seeking a stay, if any recovery notice is issued. We will at that time consider the prayer for any interim relief," the order read..The DGGI demanded approximately ₹100 crore in tax dues from Mad Over Donuts and other donut and bakery chains seeking 18% GST on sale of donuts and other bakery items.The key issue at hand is whether the supply of donuts, which are sold both for consumption on-site and for takeaway, should be classified under restaurant services, taxed at 5%, or as a bakery product, which could attract a tax upto 18% under GST..Counsel for the petitioner argued that the supply of food and edible items qualifies as a composite supply of services under the Central Goods and Services Tax (CGST) Act. Rastogi pointed to GST rate notifications that explicitly include food supplied at restaurants, eating joints, messes and canteens, whether consumed on the premises or taken away.He also referred to a government-issued circular that affirms takeaway services fall under restaurant services and should be taxed at 5%..He also pointed out procedural issues related to the issuance of a centralised SCN by the DGGI, covering multiple territorial jurisdictions. He raised concerns about the multiplicity of proceedings, suggesting that separate notices should be issued for each GST registration, rather than consolidating them into a single notice. This, he argued, would ensure greater clarity and fairness in the tax process..Counsel for DGGI, assured the Court that no recovery notice had been issued against Mad Over Donuts so far.It was stated that the petitioner's concern regarding recovery action was unfounded, which the Court accepted as an undertaking.The case is scheduled for further hearings on March 24, with the respondent tax authorities required to file their affidavit by March 17..Advocates Abhishek Rastogi, Aarya More, Pooja Rastogi and Meenal Songire appeared for the petitioner.Advocates Jitendra Mishra and Sangeeta Yadav appeared for the Additional Director-DGGI and the Assistant Commissioner- DGGI.Advocates Satyaprakash Sharma and Suman Kumar Das represented the Union of India..[Read Order]
