The Bombay High Court has granted an interim stay on a ₹57.29 crore GST demand plus penalty sought from Himesh Foods, the company that runs the Mad Over Donuts chain in India.
The Directorate General of Goods and Services Tax Intelligence (DGGI), in a show-cause notice, held that over-the-counter sale of donuts could not be treated as a restaurant service and so would face 18% GST, not 5% that the company was paying.
Himesh Foods challenged the show-cause notice before the high court. Meanwhile, the GST Appellate Authority in 2025 upheld the ₹57.29 crore demand and imposed a penalty on the company. Himesh Foods challenged that as well.
Referring to an earlier order granting interim protection in similar proceedings, a division bench of Justice GS Kulkarni and Aarti Sathe held that parity warranted similar relief in this case. Accordingly, the court stayed the operation of the adjudication order and listed the matter for final hearing on Feb 26. Appearing for the petitioner, advocate Abhishek A Rastogi submitted that GST Council’s consistent endeavour has been to bring certainty and rate rationalisation under the tax regime. He pointed out that even in recent GST Council deliberations, issue of restaurant taxation was addressed to reduce ambiguity.
Source: The Economic Times
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