The Haryana Appellate Authority for Advanced Ruling (AAAR) has ruled that a higher goods and services tax (GST) should be levied on pizza toppings as they are not pizza and have to be classified differently, reported The Economic Times.
The appellate said in its 10 March ruling that pizza toppings should have a GST of 18 percent as their preparation method is different from that of a pizza.
According to a report in daily, taxes are fixed for pizzas based on how they are prepared and sold. For instance, pizzas sold and eaten within a restaurant would attract 5 percent tax. However, a tax of 12 percent is levied when a pizza base is bought separately. And 18 percent tax is charged for a a pizza that is delivered to home.
The authority said that pizza toppings are classified as "cheese toppings" but a substantial portion of almost 22 percent of it is "vegetable fat" and hence, it does not qualify to be categorized as 'processed cheese' or a type of cheese. And so they should be classified under "food preparation" instead of processed cheese and be charged with a higher GST, it said.
The ruling, market experts believe would complicate the taxation process for pizza outlets in India.
Development Triggers a Storm in Twitter
The news triggered a storm on Twitter, with several users putting out memes, and expressing their confusion over the tax calculation, with many criticising the move.
"Pizza Gst Rate: 'Pizza topping is not pizza, so will attract a higher GST levy'
Already pizza in restaurant, pizza base, pizza delivered home.. all attract different GST rates. Basically, DO NOT EAT PIZZA," wrote one user on Twitter.
(With inputs from The Economic Times.)