In a significant development the Gujarat AAR has given a ruling that the GST rate for all types of food items will be 5% and they will not be entitled to fall in the exempted category.

Right from a Dhokla which is a favourite tea-time snack for a school kid to a senior citizen in Bengaluru who can’t do without his staple breakfast of piping hot Rava-Idlis, an advance ruling, issued by the Gujarat bench, has ‘united’ foodies across India with a single goods and services tax (GST) rate. Despite various products of instant flour mixes falling in different sub-headings, fortunately the GST rate was the same at 5%.

On the flip side, the Authority for Advance Ruling did not agree with the submission of the applicant that a nil rate should apply as his instant flour products were nothing but grain and pulse flour mixed with spices, condiments and flavours. In this case, a businessman who manufactured and sold varied types of instant mixed flour under the ‘Talod’ brand name sought an advance ruling to determine the GST rates on his products and also on chutney powder, which was provided free with a few products — such as the Bhajiya mix.

The instant mixed flour sold by him was used by customers to prepare a range of Indian dishes such as Khaman, Gota, Handwa, Dhokla, Rice Idlis, Rava Idlis, Dahiwada, Bhajiya, Upma and so on. The ingredients differed from product to product. To illustrate the Dhokla mix, flour consisted of Udad dal, Chana dal, Sugar, Salt, Sodium Bicarbonate, Citric acid and Asafoedtida. The ingredients of the Rava-Idli mix were Gram dal, Udad dal, Rava, Citric acid, Salt, Green Chilli, Curry leaves, and Mustard seeds.

The Gujarat AAR bench has to delve deeply into the classification and sub-headings. While products such as the Dhokla mix, Dahi wada mix, Bhajiya mix and Idli mix fell under one sub-heading; Rava-Idli mix, Upma mix and Muthiya mix fell under another subheading.  This despite the fact that all products were essentially flour and spices. The saving grace, there was no difference in the GST rate, which was the same at 5%. As regards Chutney powder, which was supplied free with a few flour mix categories, the AAR held it to be a ‘mixed supply of goods’ — this too had a GST rate of 5%.