The Haryana Appellate Authority of Advance Ruling (AAAR) bench held that 18% GST is payable on pizza topping as pizza topping is not pizza.
The appellant is in the business of distributing various dairy and non-dairy products and is registered with the jurisdictional GST authorities. The product “pizza topping,” which is sold as a proprietary food consisting of water, mozzarella cheese, vegetable oil, and milk solids along with premixes of emulsifiers and stabilizers.
The applicant submitted that the product “Pizza Topping” contained 14.5% mozzarella cheese and 15% other milk products, along with other ingredients, forming a type of cheese. Thus, it is classifiable under heading “cheese” and chargeable to GST at the rate of 12%.
The applicant has sought an advance ruling on the issue of whether the product “pizza topping” is classifiable under “process cheese” attracting 5% IGST.
The AAAR held that the “pizza topping” being manufactured by the applicant cannot be classified as “process cheese” but rather it merits classification under heading “Food Preparations not elsewhere specified or included” and chargeable to 18%IGST or 9% CGST and 9% SGST.
The appellant contended that the pizza topping contains mozzarella cheese, constituting almost 15% of the total product. It forms the main ingredient to which other ingredients are added in small quantities. The product contains 15% of other milk products such as milk solids and skimmed milk powder. Thus, almost 30% of the product consists of cheese and other milk derivatives.
Thus, it is concluded that the impugned product “Pizza Topping,” would merit classification as “Food preparations not elsewhere specified or included’ and taxable at 18%.
GST rates on pizzas differ on the basis of how they are prepared and sold. A pizza sold and eaten within a restaurant attracts 5% GST, the pizza base bought separately attracts 12% while a pizza delivered at home attracts 18% GST. A pizza topping is not a pizza and hence should be classified differently and levied a higher 18%
