Sweet makers are finding it difficult to decipher the taxation rates under GST. For example: Plain sandesh, which is a ‘sweet’, is taxed at rate of 5%. However, chocolate Sandesh with a chocolate-flavoured layer on top risks being bundled with chocolates and taxed at 28% since they are having more than 5 % Cocoa content. Food items like fruit custard, flavoured ice cream, ice-cream sandesh will be attracting a tax rate as high of 28%.The diabetic-friendly versions of sweets, gums, etc that contain synthetic sweetening agents like sorbitol come under 18% GST.
As of now, sweet makers are coping with this confusion by curtailing the flavors and variety. They are making plain sweets just to avoid the confusion and subsequent penalties.
Sellers are getting creative for lower tax rates. As fruit jellies, mousse, pastries and pies come under the 18% GST slab, some are considering renaming and re-packaging them as sweets to pay 5% tax. Shopkeepers said western desserts like macaroons, custards, tarts, cakes and pastries could even be Indianised to avoid the high tax rate of 18%.
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