KitKat is a biscuit and Parachute Coconut oil is edible! That's the new topic for GST debate

In the case of Nestle India Ltd Vs Commissioner of Central Excise, Mumbai of 1999, it was ruled that KitKat is a biscuit and not a chocolate that is taxed high. And now with the government’s decision to roll out GST from July onwards, many FMCG companies are getting haunted by the past ghosts.

Just like KitKat is a biscuit, vicks is a medicine, Parachute coconut oil is edible oil. The ambiguity is lot of our everyday necessities is making it difficult for the government to fix the tax.

"In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level," one of the persons in the know told The Times of India. "Now we have a chance to go ahead with specifying the products in a way based on the old cases so that similar situations don't arise."

"The GST rates for each and every item are not yet decided as the government is categorising products and what rates can be applied on each category of goods," MS Mani, senior director, Deloitte Haskins & Sells told TOI. "There is a chance that some of the old issues raised by the tax department regarding category of certain goods may come back to haunt some companies or products as GST is a new law and can redefine rates and what goods would fall under its preview."