Policy Watch: The doughnuts catching India in a jam
Doughnuts may bedelicious, but their tax treatment less so.
Dear all,
We are just a few weeks away from our Ideas for India® conference, is now out. Scroll down for more info and to book your tickets. Members attend for free, so make sure you become a Member today here.
Tonight, the King’s College’s Geopolitics Forum is hosting a session on Multi-alignment: India’s New Plan, on Mon 17th March, featuring Bridge India, the Confederation of Indian Industry and King’s India Institute. Scroll down for more info.
Bridge India is delighted to be awarding Dr Chiranjeevi Konidela, the Indian actor, politician, and philanthropist known for his work in Telugu cinema, with a Lifetime Achievement honour in the House of Commons this Thursday.
Chiranjeevi Garu is widely regarded as one of the most successful and influential actors in the history of Indian cinema. He has received numerous honours, including the Padma Bhushan in 2006 and the Padma Vibhushan in 2024, as well as the IFFI Indian Film Personality of the Year Award in 2022. Added to this is Bridge India’s first-ever Lifetime Achievement award, for his contribution to public service and cultural leadership.
You may remember our January Substack Policy Watch: Popcorn outrage hides $51.9bn GST tax disputes about popcorn being taxed at 5%, 12% or 18% in India, depending on its flavouring and packing? Well, Mad Over Donuts is facing Rs 100 crore (£10m) tax notice for allegedly misclassifying its business. Dunkin Donuts, Theobroma and Krispy Kreme are also in trouble. Scroll down for more on this sweet mess.
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Rajat is Head of Personal Banking at OakNorth Bank and serves on the Board of a couple of British renewably energy companies. Prior to the UK, he worked for 15 years in India and South Africa. He is passionate about supporting young entrepreneurs, particularly in fintech.
Akshay has recently moved to London from Ahmedabad. He works in public policy relating to foreign policy and human rights issues, having previously lived in the US.
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Ragasudha Vinjamuri is producing and starring in a captivating music and dance creation "Maatru Vandana" (Tributes to Mothers) on a rarely touched story from centuries-old texts, to celebrate Mother’s Day at the Bharatiya Vidya Bhavan in London on Fri 21 March 2025. Scroll down for more.
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Upcoming events
***Last chance to book*** Multi-alignment: India’s New Plan (6pm, Mon 17 Mar | Book here)
The last few weeks in the world of international relations and public diplomacy have been eventful, thanks largely to the White House:
JD Vance's speech at the Munich Security Conference, Trump's attempted takeover of the Gaza Strip, Britain's own decision to slash aid funding, the praise of Russia from the White House, public dressing down of Zelensky and cutting of both aid and intelligence sharing from Ukraine, have all led to very different conversations about geopolitical friendships across the globe.
In this new paradigm of multi-alignment, where does India stand? Does the US' abrupt exit from decades-long commitment open up space for India to gain diplomatically? Join experts Shehla Hasan (Director - UK, CII), Anit Mukherjee (Senior Lecturer, King’s India Institute) and Pratik Dattani.
When: 6pm onwards, Mon 17 March
Where: River Room (K2.14), Strand Campus, King’s College London
Booking: Click here for more info (no entry without pre-registration)
***Last chance to book*** Network Tree x Bridge India Business Networking (6pm, 19 Mar | Book here)
Network Tree and Bridge India get together for an evening of networking, at Cinnamon Kitchen. You’ll meet around 50 senior professionals from finance, business, tech, insurance and international trade.
When: 6pm onwards, Wed 12 February
Where: Anise Bar, Cinnamon Kitchens, 9 Devonshire Square, London EC2M 4YL
Booking: Free for Corporate Members, otherwise £45 | Canapes and welcome drink included | Book here
***Last chance to book*** Maatru Vandana (6pm, 21 Mar | Book here)
From time immemorial, Mother is venerated in many cultures, civilisations, and literature, laying a strong emphasis on her role in safeguarding and protection. The presence of guardian mother goddesses forms an important fabric of social and cultural narratives across different regions of the world.
Maatru Vandana is an initiative from the Sanskruti Centre and Ragasudha Vinjamuri which beautifully raises cross-cultural awareness and understanding of the mother goddesses mentioned in centuries-old oral traditions and Puranic texts of India, about the deities who guard, reassure safety and remove fear among people. The dance in different styles depicts their heroic acts in enlightening many generations and restoring peace in the society. The dance also articulates the role of the Mother in inculcating values and society building, aligning befittingly with the Mother’s Day celebrations in the UK.
When: 6pm onwards, Fri 21 March
Where: Bharatiya Vidya Bhavan, London, W14 9HE
Booking: Book here
Ideas for India conference (30 May | Royal Lancaster London | Book here)
Bridge India’s annual Ideas for India conference is back, on Friday 30 May. It is the leading forum to engage in high level discussions on the New India.
Our event brings together policy, business, tech, media and civil society leaders for pertinent discussions on India’s development.
Ideas for India is part of the wider India Week®. Here’s how you can engage:
Get a ticket: Head over to our website right away.
Suggest a speaker, or explore exhibition / sponsorship options.
Bring a delegation: If you run a community, business or a membership organisation, let’s explore how to enable access for all your clients and network.
Feel free to email us at contact@bridgeindia.org.uk and explore these opportunities further.
When: All day, Fri 30 May
Where: Royal Lancaster London, Lancaster Terrace, London W2 2T
Tickets: Free for Members, £200 or £500 for Non-Members | Book here
Policy Watch: The doughnut catching India in a jam
On 24 March, a two-judge bench in the Bombay High Court will decide whether doughnuts should be treated as “bakery products” (with 18% GST) or “restaurant services” (taxed at 5%).
It’s a first-of-its-kind case that could have far-reaching implications, not just for restaurant chains and bakery businesses but also other industries relying on the classification of food services under GST.
It all started when the Directorate General of Goods and Service Tax Intelligence (DGGI) sent a show-cause notice to Mad Over Donuts (which entered India in 2008 with its first store in Noida) for Rs 100 crore in back taxes and fines for incorrectly classifying their business as a restaurant service rather than a bakery product.
What are the arguments?
The lawyers for MAD say that the supply of donuts is a service since it falls under the composite supply of goods and services, covered in Schedule II to the Central Goods and Services Tax (CGST) Act, Entry 6. The Entry says, when goods and services are bundled and sold together as a “composite supply”, they should be treated as services.
They cited a GST notification from the Ministry of Finance that states restaurant services include food supplied at restaurants and other eating places, regardless of whether it’s for consumption on the premises or as takeaway. It says takeaway services should be taxed at 5%.
The notice said that the head chef told the DGCI, that the doughnuts are prepared in a central kitchen and then sent to individual outlets. At these outlets, “garnishing, chocolate pouring, and packing” are done before an item is sold, thus the products are sold “over the counter” and liable for the higher GST.
But the company says its outlets have a kitchen that still needs to heat the items sold, and put the doughnuts through a final preparation before sale, so 5% is more appropriate.
But the DGCI said this argument is “stretching the definition of service beyond” the guidelines under the GST Act. They say, simple garnishing should not be considered final preparation.
Here we go again…
In our earlier Substack, we outlined that GST disputes worth over $50 billion.
The Kerala High Court on 2 April has year, halted the enforcement of a ruling by the Kerala Authority for Advance Ruling (AAR), which said that Modern Food’s Classic Malabar Parota and Whole Wheat Malabar Parota should be taxed at 18% as “food preparations”, rather than “frozen rotis” or “bread”, which is lower taxed on the basis that they took longer to cook and therefore could not be classified as ready for consumption.
To reiterate, the argument was: parotta take longer to heat on a tawa than chappatis, so their tax rate should be higher.
Earlier this year a court said that for carbonated fruit drink that has more than 10% soluble solids and food juice content along with sugar, the presence of the fruit juice creates the essential character of the drink i.e. it’s not merely a flavouring agent. So because of the dominant nature of this taste, carbonated fruit drinks should be taxed at 12% GST, the same as fruit pulp or fruit based drinks (classifiable under CTH 2202 99 20).
Sources: Shivadass & Shivadass, ThePrint, The Independent.
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The Bridge India Team
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