New Delhi, March 15 – The Congress party on Saturday criticized the government over the Goods and Services Tax (GST) system, highlighting inconsistencies in tax rates on various products. Referring to a recent controversy involving a well-known donut chain, Congress argued that the country now needs a revised version of GST, which it termed as ‘GST 2.0.’
Congress General Secretary Jairam Ramesh cited a news report stating that Singapore-based donut chain Mad Over Donuts has been issued a tax notice of ₹100 crore for allegedly misclassifying its business and paying a lower 5 percent GST instead of the required 18 percent applicable on bakery products. The notice has sparked a legal battle that has now reached the Bombay High Court.
Donuts, typically made from flour and decorated with chocolate, icing, powdered sugar, or fruit, are a popular snack worldwide. The tax dispute revolves around whether they should be classified under restaurant services, attracting 5 percent GST, or bakery products, which are taxed at 18 percent.
As per agency report, Ramesh took to social media platform X, stating, "After popcorn, now donuts are feeling the impact of GST. Mad Over Donuts is facing a ₹100 crore tax notice for alleged misclassification of its business. While the company paid 5 percent GST by classifying its product as a restaurant service, authorities claim that bakery items fall under the 18 percent tax bracket."
He further criticized the government’s approach, calling the situation a reflection of the challenges businesses face under the current GST system. Taking a jibe at the ease of doing business in India, he remarked that such tax disputes make a strong case for introducing GST 2.0.
The Congress party has been vocal about its demand for reforms in the GST structure, arguing that frequent classification disputes and varying tax slabs create hurdles for businesses. With this latest controversy reaching the courts, the debate over GST reforms is expected to gain further momentum in the political landscape.
