GUWAHATI: The Bombay High Court is set to rule on whether donuts and cakes should be taxed as part of restaurant services or as separate bakery products under the Goods and Services Tax (GST) framework.
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The decision could have significant implications for bakery chains across India, as the Directorate General of GST Intelligence (DGGI) has demanded around ₹100 crore in tax dues from Mad Over Donuts and similar establishments.
A division bench of Justices BP Colabawalla and Firdosh Pooniwalla was hearing a plea filed by Himesh Foods, the company behind Mad Over Donuts, challenging a show-cause notice (SCN) issued by the DGGI. The Court recorded the DGGI’s assurance that no coercive recovery action would be taken while the case is pending, allowing the petitioner to seek relief if a recovery notice is issued.
At the heart of the dispute is whether the sale of donuts—both for dine-in and takeaway—should be classified under restaurant services, which attract a 5% GST, or as bakery products, which could be taxed up to 18%.
