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2024 (4) TMI 555 - HC - GSTEligibility for Composition scheme - ice-cream - limited grievance of the petitioners is that the ‘Ice Cream’ has been placed on par with Pan Masala and Tobacco - proper reason assigned by the Council for the inclusion of Ice Cream Manufacturers in the negative list - HELD THAT:- From a perusal of the resolution passed by the GST Council, it is evident that the goods and services have been divided into 05 Tax slabs for collection of the tax, that is (i) 0%, (ii) 5%, (iii) 12%, (iv) 18% and (v) 28%. It was discussed in the meeting that the Small Scale Ice Cream Industries have been put out of the composition scheme and the Manufacturers have been put under the category of 18% of the GST Scheme. It was also discussed that except for the big brands of Ice Cream Industries, 80-90% of Ice Cream Industries fall under the Small Scale Industries and are low in their turnover and transaction business. The Council after discussion, put Pasta, Macaroni, Cakes, Malt, Mineral Water, Tobacco, Pan Masala etc. under the category of 18% GST and at the same time, kept the rate of tax for Human Hair (dressed, Thinned, and Bleached), Agarbatti at nil. The Council kept the rate of tax for certain items at 5% or 12%, though those were the Luxurious items. In the matter of Ayurveda Pharmacy [1989 (3) TMI 187 - SUPREME COURT] while dealing with the levy of sales tax on Ayurvedic drugs and medicines, the Hon'ble Supreme Court held that the Legislature is authorized to select different rates of tax for different commodities, but for the same class or category, there must be a rational basis for discrimination - From a perusal of the decision taken by the Council in the meeting, it appears that no reason has been assigned by the Council to exclude the Ice Cream Manufacturers from the benefit of Section 10(1) of the GST Act. The Council ought to have taken into consideration the socio-political effect while putting the Ice Cream within the tax regime of 18%. The taxation law should pass the test of Article 14 of the Constitution of India and there should be reasonable classification. Admittedly, Ice Cream is being widely consumed by the people of India. It cannot be termed a luxurious item as all kinds of people use to taste Ice Cream. The Council ought to have taken into consideration the socio-economic effect as mentioned in the Constitution. This petition is disposed of with a direction to respondent No. 2/GST Council to reconsider the exclusion of Small-Scale Manufacturers of Ice Cream from the benefit of Section 10(1) of the GST Act.
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