Dunkin' Donuts, Theobroma, other bakery chains get GST notices over 18% tax demand: Report
At least six popular donut and bakery chains have received show cause notices from GST authorities for classifying their businesses as 'restaurant services', to be taxed at a lower GST rate of 5 percent, NDTV Profit reported citing people familiar with the matter.
Demanding 18 percent GST on the sale of donuts and bakery items, the GST authorities have sent the show cause notices to Dunkin' Donuts, Theobroma, Mad Over Donuts and Krispy Kreme, among others. The notices pertain to the period between the fiscal 2016-17 and fiscal 2022-2023. The tax demands mentioned in these notices amount to Rs 50-60 crore for each company, the report said.
Moneycontrol couldn't independently verify the report.
Mad Over Donuts has moved the Bombay High Court, challenging the GST demand notice. The case will likely be heard by the court next week.
Notably, cakes, pastries and other bakery items are charged 18 percent GST, subject to conditions. Meanwhile, restaurant services are charged 5 percent GST unless Input Tax Credit (ITC) is availed on certain goods and services.
