GST Controversy: Donuts Caught in the Tax Crossfire

The Congress criticizes the government over differential GST rates, highlighting Singapore's 'Mad Over Donuts' facing a Rs 100 crore tax notice for misclassifying its service. With the case in Bombay High Court, Congress emphasizes the urgency for GST 2.0, a simpler tax system promised in their 2024 manifesto.

On Saturday, the Congress party criticized the government for its handling of differential GST rates, drawing attention to the Singapore-based chain, Mad Over Donuts, which faces a Rs 100 crore tax notice. The notice accuses the company of misclassifying its business, allegedly paying only 5% GST by labeling itself as a restaurant, rather than the 18% required for bakery items.

Congress general secretary Jairam Ramesh highlighted this issue on social media platform X, labeling the situation 'GSTitis' after a similar controversy involving popcorn. The case is currently under review by the Bombay High Court, intensifying concerns over India's 'ease of doing business'. Ramesh called for the introduction of 'GST 2.0', a simplified tax system.

The Congress has previously criticized GST complexities, citing three different tax slabs for popcorn as evidence. Despite Finance Minister Nirmala Sitharaman's assurance of future GST reductions, Congress insists on a radical restructuring for a 'Good and Simple Tax' as part of their 2024 election manifesto.