Amul Dairy Case: Flavored Milk to attract 12 percent GST, Gujarat AAR verdict

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There has been confusion over how much GST should be imposed on flavored milk in the country. Benches of Karnataka and Gujarat have given different decisions regarding this.

Gujarat AAR ordered

The application was filed by Amul Dairy

Karnataka AAR has also given decision

Does Flavored Milk come under the purview of GST. If yes, how much GST should be imposed on it. This question has arisen because the Karnataka and Gujarat benches of the Authority for Advanced Ruling (AAR) have issued different orders regarding this.

Gujarat AAR ordered

Let us tell that different AARs have been made across the country to appeal against GST. Gujarat AAR has said in one of its orders that Flavored Milk is basically ‘milk containing beverages’ and should attract 12 per cent GST. The authority gave this decision on the application of Gujarat Co-operative Milk Marketing Federation Limited. This company sells dairy products across the country under the brand name Amul.

The application was filed by Amul Dairy

Amul Dairy appealed to the Gujarat AAR to bring flavored milk under the purview of GST. The company sells its flavored milk under the name Amul Cool and Amul Cool Cafe. The company applied in the AAR and explained the entire process of making flavored milk from milk. The company said that the process of flavored milk is the standardization of fresh milk according to the amount of fat. It is heated to a certain temperature and filtered. After that, sugar and different flavors are mixed and packed in bottles.

Karnataka AAR has also given decision

After hearing the company’s plea, the Authority decided that Flavored Milk would be classified as ‘Drink Milk’. Which will attract 12 percent GST. Earlier, on the application of Karnataka Cooperative Milk Producers Association, Karnataka AAR had ruled that flavored milk should attract 5 percent GST.

Litigation will increase litigation Rajat Mohan, Senior Partner, AMRG & Associates, says that litigation is increasing in the country due to the contradictory decisions of the AAR of various states. They are making hyper technical interpretation of the rules of AAR GST. Due to which people are forced to visit government offices. He said that the AAR of the two states have given different decisions on flavored milk. In such a situation, the outline of a new trial has been prepared.

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