The Authority for Advance Rulings (AAR), Maharashtra has held that the supply of an ice-cream Scoop would attract 18 per cent Goods and Services Tax (GST).
The applicant- Company, Arihant Enterprises, under a franchisee model, sold ice-creams in retail packs (party packs or tubs, typically of 500 grams) and also by way of ice-cream scoops. Sale of retail packs contributed 75% to the company’s turnover.
The company argued that even when it served scoops of ice-cream, the only activity was transfer of goods (ice-cream) to a cone or a cup. The service element involved was minimal. Only some of its outlets provided a few seats, but this was to benefit senior citizens and mothers accompanied by toddlers. Customers were free to eat the scoops outside the outlets.
The AAR held that even serving scoops of ice-cream did not contain any service element and was a supply of goods. It would attract GST at 18% and the applicant would be able to avail input tax credit.