Case Of: VRB Consumer Products Private Limited
Issued By: Rajasthan AAR
Order No: WBAAR 04 of 2024
Date: 31st July 2024
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Softy Ice Cream Not a Dairy Product,Subject to 18% GST
VRB Consumer Products Pvt Ltd approached the Rajasthan Authority of Advance Ruling (AAR) regarding the taxability of their product “Vanilla Mix” also known at ‘Softy Ice Cream’.
The product contains 61.2% sugar, 34% milk solids (skimmed milk powder), and 4.8% other ingredients (flavoring substances, salt).
The core question was whether the “Vanilla Mix” qualifies as a dairy product or falls under the category of processed food preparation for determining the applicable GST rate.
The Authority noted that the product’s smooth and creamy texture was a result of both its composition and the processing in soft serve machines. Sugar was identified as the dominant ingredient.
AAR ruled that the product cannot be classified as a “dairy product” despite containing milk solids, primarily due to the predominant sugar content and additional processing.
Under the GST law, processed food preparations draw 18% GST, including products like table cream, jellies, and ice creams. The “Vanilla Mix” was thus classified under this category.
The AAR held that “Vanilla Mix” (softy ice cream mix) is subject to 18% GST, not the lower rate applicable to dairy products.