Softy Ice-Cream Mix Classified as Sugar-Based as Sugar is a Major ingredient will attract 18% GST; rules GST AAR

Softy ice cream mix in vanilla flavour is not a dairy product and would be subject to 18% GST, according to the Rajasthan Bench of the Authority of Advance Ruling.

VRB Consumer Products Pvt Ltd has addressed the AAR about the taxability of vanilla mix in powder form, which would contain 61.2% sugar, 34% milk solids (skimmed milk powder), and 4.8% additional ingredients like flavourings and salt.

The Authority of Advance Ruling (AAR) found that each ingredient plays an individual part in making the soft serve smooth and creamy in texture. Furthermore, it is clear that not only the components of the product but also the processing performed in the soft serve machine, play an important part in producing the smooth and creamy texture characteristic of soft serves.

According to GST law, food preparations that are further processed for human consumption are subject to an 18% tax. Preparations containing milk powder, sugar, and any other added ingredients, such as powder for table cream, jellies, ice cream, and similar preparations, are also subject to 18% GST.

“It is also obvious that the product in question cannot be termed as a dairy produce,” the RAAR stated.

Therefore, the product ‘Vanilla Mix’—dried softy ice cream mix (low fat) in vanilla flavour, will be subject to 18% GST.

According to a tax specialist, the court emphasized that the product’s main ingredient is sugar, not milk solids, so classifying it as a processed food preparation rather than a dairy product.

“The classification was impacted by the product’s intended use in soft serve machines, as well as extra components such as stabilizers and flavouring compounds. This decision highlights the importance of dominant ingredients and manufacturing processes in determining GST classification,” he added.

For Official Ruling Download PDF Given Below: