Ice cream parlours are feeling the heat as GST Authorities in various States have started issuing summons since an October 6 clarification on a new system of levy.

In its September 17 meeting, the GST Council clarified that ice cream parlours sell already manufactured ice cream. The government said a GST of 18% should be levied on ice cream even when they are sold inside a parlour. Earlier, ice creams attracted 5% tax when sold inside parlours and 18% outside.

Industry told that GST at the rate of 5% on retail sale was being collected till october 5. After October 6, the clarification was to collect 18% gst but at the retrospective effect of applicability since July 1,2017.

Also Read : Fixed GST at 18% imposed for ice cream in parlours or outside

This impression has gained ground because tax officials have worded the summons subsequently issued as “Summons for paying 13% difference since November 2017.

For the moment Ice cream manufacturers are awaiting further clarification from the finance ministry. They have submitted representation to the ministry saying the pandemic has already pushed innumerable such persons out of the business. In such a situation if the Ice cream parlours are coerced into paying GST @ 18% with effect from July 1 2017 , most of them would be compelled to close down their businesses.

Source : The Hindu business Line Nov 17 2021