Branded bowl of fresh fruits to face 5% GST – Times of India

MUMBAI: Two odd years ago, actor Rahul Bose broke the internet when he tweeted that he was charged a steep Rs 442.5 (including goods & services tax, or GST) for two bananas at a well-known five-star hotel in Chandigarh. This had led to inquiries by the GST authorities and ultimately a fine was imposed on the hotel as fruits do not attract GST.
But, and there is a big but involved, if fruits have been sliced and diced and served to customers in sealed bowls, they will attract GST at 5%.
The Karnataka Authority for Advance Rulings (AAR), which passed this ruling, did not deal with an instance of fruits served in a hotel, but fruits supplied by Juzi Fruits, a private company in Bengaluru. This company is engaged in the purchase and subsequent supply of fresh fruits in bowls (with or without the addition of dry fruits & nuts).

The process involves washing, cleaning, peeling and dicing (if needed) of the fruits and packaging them in sealed bowls for ready consumption. No preservatives or additives are added. Only excess oxygen in the bowl is removed to extend the life of the fruits, and the bowl is covered in transparent film.
While edible fruits and nuts do not attract GST, the AAR bench held that these bowls of fruit, which are sold under a brand name, would attract GST at the rate of 5% under Entry Number 59 of Schedule 1. If the fresh fruits were sold with dry fruits & nuts, then it would be a mixed supply and attract GST at the higher rate applicable to either the fruits or the dry fruits & nuts. In the absence of specific details of dry fruits & nuts used, the AAR bench declined to specify the GST rate.
The bench added that Juzi Fruits would be entitled to input tax credit for the GST borne by it against its purchases and related expenses.