Flavoured milk is not milk; it is in fact a drink that has milk as an ingredient, the Appellate Authority of Advance Ruling (AAAR) has said.
Milk is outside the gamut of goods and services tax but flavoured milk attracts 12% tax.
Vadilal, the ice cream major, had approached the apex appellate authority for clarity on the matter.
The company had approached the AAAR after an Authority for Advance Ruling (AAR) had said that GST should be applicable on flavoured milk.
Gujarat AAAR affirmed the AAR ruling on classification and said that flavoured milk is not milk but a beverage containing milk.
The AAAR ruled that the flavoured milk is not the natural form of milk but was obtained after the application of specific processes on the milk.
Earlier, too, several AARs have ruled on goods and services tax applicable on food items. Parata is not similar to paratha but naan, and a samosa eaten over the counter and on a chair outside the shop probably tastes different, so it should be taxed differently.
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