The claim has been pending since the GST regime came into force, as the small ice cream manufacturers along with sin products such as Pan Masala and Gutka were kept out of the composition scheme.
Under the scheme, the councilors, manufacturers and dealers of goods have to pay 1 percent of the turnover as tax; Restaurants without alcohol 5 percent; and other service providers 6 percent. Companies with an annual turnover of up to? 1.5 billion can opt for the composition scheme, but do not receive any input tax deduction.
In this regard, the Indian Association of Small Ice Cream Manufacturers (ISSICMA) had made several unsuccessful allegations before the Union’s Ministry of Finance. ISSICMA general secretary Vijay Kumar Malhotra told FnB News that the GST Council had not acted even after the Delhi Supreme Court asked it to reconsider its position on the small ice cream maker makeup program.
“The Delhi Supreme Court gave the GST Council 90 days to reconsider its opinion on the composition plan for us. Instead, however, it was found that the GST Council referred the matter to the Facilities Committee at its May 28 meeting, ”he said.
The matter will now be heard in the High Court in July.
Meanwhile, the refusal of the composition scheme to small ice cream manufacturers was justified with the argument that the input costs for the ice cream industry are exempt from the GST regulation (for milk and cream).
However, Malhotra added that the input cost for small ice cream makers is 50% raw material plus 30% cost to the seller (seller). 18% GST is paid on this and the small manufacturers only have a 2% margin.
The Indian Ice Cream Manufacturers Association has also stated on request that it goes hand in hand with the demand from small ice cream manufacturers. And not only that, the GST Council must also rethink the 18% tax bracket for ice cream and lower it to 12%.