New Delhi: Ice cream will now be subject to 18 per cent GST. The Central Board of Indirect Taxes and Border Tax (CBIC) has said that ice cream is not made in parlors, but is sold. Therefore, it will be subject to GST at the rate of 12%. So it cannot be placed in the category of products made and served in restaurants. As a result, not only five per cent but 18 per cent GST has been imposed on it.
The GST Council met last month. There were changes in GST rates on 21 items. Clarification was sought from the CBIC regarding GST rates on items belonging to different organizations.
Regarding ice cream, the board said that even though it has some aspect of service in its sale, it does not know any ritual of cooking it in a parlor or restaurant or baking it in a restaurant. Ice cream is not made in any parlor or restaurant, even if they sell it from there.
Earlier, if you ate ice cream inside a parlor or restaurant, it was only 5 per cent GST and if you take it home, it was 18 per cent. Now if you eat ice cream sitting there or taking it home, it will be 18 per cent GST. Thus ice cream has become more expensive for ice cream connoisseurs.
In that sense, it is better to sell it. Ernst & Wayne's tax partner said the Authority of Advance Ruling (AAR) had said in many such cases that the service sold at the ice cream parlor would be treated the same as the restaurant service. Five per cent GST has been imposed on it. Now this clarification from the CBIC will create a state of suspicion in the minds of those executives who sell ready-made food items.
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