Like pizza, GST (Goods and Services Tax) can also be levied on pizza toppings. In fact, the Haryana Appellate Authority for Advance Ruling (AAAR) has said in a judgment that it needs to be looked at separately. This is not a pizza, so 18 per cent GST should be levied on it. However, there are fears of many difficulties in its taxation.
What is the logic According to AAAR, the method of making pizza toppings is different from pizza. A variety of ingredients are used in toppings. For example, vegetable fat is an important part of pizza toppings. That is to say, it is available with more material than pizza, so a tax of 18 percent should be levied. The AAAR states that pizza toppings need to be classified as ‘food preparation’.
Price may increase: According to experts, in the event of implementation, there will be a confusion about pizza. For example, restaurants or pizza companies will have to pay 18 per cent GST for purchasing pizza toppings and will be able to charge only 5 per cent GST when they go to sell pizza to the customer. This may have an impact on margins. In such a situation, pizza companies can overcome this margin shortfall by increasing the prices.
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Let us tell you that the rate of GST on the pizza sold or eaten in the restaurant is 5 percent. At the same time, when it is delivered at home, the rate of GST increases to 18 percent. Similarly, a separately purchased pizza base attracts a GST rate of 12 per cent.