Not cheesy enough: Pizza topping cheese to attract 18% GST

In an existential question for the ever-loved pizza, a new puzzling ruling by the Haryana Appellate Authority of Advance Ruling (AAAR) will have lovers of the fast food wondering, which part of the pizza is taxed how much.

The Haryana AAAR held that pizza topping does not qualify as pizza and will attract 18 per cent GST, according to the AAAR order on Live Law.

The Apellant in the case argued that the pizza topping in question, which was basically processed mozzarella cheese, is essentially a cheese and should fall under that bracket of taxation —12 per cent.

However, the AAAR contended that even though it retains its 'cheesy characteristic', the item contains 22 per cent vegetable fat and other emulsifiers, which form a majority portion of its ingredients, altering its essential composition, and hence, cannot be taxed as a cheese or under dairy products.

The AAAR ruled that under the Harmonised System of Nomenclature code (HNS), the 'impugned pizza topping' cannot be under chapter 0406 but under chapter 2106 (Food Preparations not elsewhere specified or included) in the Customs Tariff Act (1975), attracting a GST of 18 per cent.

Under the HNS Code, pizza base attracts 5 per cent GST and dairy products like cheese attract 12 per cent GST. With the new AAAR observations, pizza topping cheese like the one in case will attract an 18 per cent GST if its essential components contain a majority of non-cheese products.

Interestingly, 5 per cent GST is levied on pizza in a restaurant, while 18 per cent GST is charged when the same pizza is home-delivered.

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