Confusion reigns supreme for all the halwais and sweet makers as GST poses a conundrum for the mithaiwalas with respect to which GST slab the sweets would be taxed. Say, for example, a plain barfi is taxed at 5% GST while there are question marks over chocolate barfi (layered with chocolate on top) whether it will be bracketed under the 5% or 28% bracket. Sweet makers even fear that plain barfi simply garnished with cardamom and dry fruits could be taxed at 12 per cent GST.
This is just the tip of the iceberg. More complex desserts such as falooda (mix of ice cream, fruit and jelly), vermicelli pudding, fruit jelly custard trifle, etc. can easily be bundled into the highest tax bracket – 28%. Moreover, even sweets containing artificial sweeteners such as sorbitol come under the 18% tax slab.
Due to confusion over GST rates, sweet makers are averse to taking risk and are taking the safer route by reducing the variety of their offerings. “We are making only plain sandesh, plain badusha, plain barfi and plain peda,” said Mahesh Rajasekhar of the confectionarychain KC Das which has stopped making mango and chocolate sandesh.