Bibek Debroy decodes the curious case of tax on pizza toppings

By Bibek Debroy

What is the GST rate on pizzas? There isn’t one. That’s the point. The GST rate on pizza bread – note the expression – is 5%. But if it is not pizza bread, the rate will be 12%. With that background, there is nothing wrong in what the Haryana AAAR has said. It has decided that pizza topping will be taxed at 12%, since pizza topping isn’t pizza bread.

How many products are there? Perhaps an infinite number. Under the harmonised system of nomenclature (HSN) used for the goods and service tax (GST), the more the number of digits, the finer the description. At a six-digit level, there will be 5,000-odd items, many more as one disaggregates digits further. Take something like HSN 62. This represents ‘articles of apparel and clothing accessories, not knitted or crocheted’. …..

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