RATE OF TAX ON CAKE GEL USED IN BAKERY INDUSTRY

[Sadanand Bulbule]

Dear experts

'Cake gels' as food additives and premixes are used in bakery industries to improve the quality, texture and aeration of sponge cakes. Cake gel being a functional additive used in bakery applications. It is not a flavouring,emulsifier, or stand alaone bakery item.

What is the HSN and rate of GST on such cake gels ? Also indicate supporting AARs, if any.

AI Summary

Cake gels for bakery industries classified under HSN 2106 as food preparations at 18% GST rate A discussion forum addressed GST classification and rates for cake gels used in bakery industries to improve texture and aeration of sponge cakes. The query sought appropriate HSN codes and supporting AAR rulings. Two classifications emerged: HSN 1704 (sugar confectionery) per Maharashtra AAR ruling on glaze gels at 18% GST, and HSN 2106 (food preparations not elsewhere specified) per Tamil Nadu AAR ruling on cake gels, also at 18% GST. Forum participants debated which classification was more precise, citing Supreme Court precedents on tariff interpretation principles including specific over general entries, natural meaning, popular sense understanding, and burden of proof requirements. The consensus favored HSN 2106 classification for cake gels as food additives rather than sugar confectionery, supported by their functional use as industrial bakery inputs rather than ready-to-consume products.