GST on Ice Cream

GST on ice cream is an important topic for manufacturers, sellers, and food businesses across India. Ice cream is treated as a taxable product under GST because it is made using ingredients such as milk, sugar, and flavours. The tax rules apply at different stages of production and sale, depending on how the product is supplied.

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GST Rate on Ice Cream

Ice cream comes under HSN Code 2105 and is treated as a product, not a service. When ice cream is sold in packets or as scoops from a shop, 18% GST is charged on it. This tax rate stays the same even if the ice cream has cocoa in it.

Ice cream makers and sellers cannot choose the composition scheme, even if their yearly sales are less than ₹1.5 crore. Because of this, they must register under the regular GST system and collect GST from customers while selling ice cream.

GST on Ice Cream Parlours and Restaurants

Ice cream sold by parlours is also taxed at 18% GST, with input tax credit allowed. As clarified by GST authorities, ice cream parlours are not treated as restaurants, even if they provide limited seating. The sale is considered a supply of goods, not a service.

When ice cream is served as part of a restaurant meal, it is treated as restaurant service. In such cases, GST applies as per the restaurant’s tax structure. If the restaurant pays GST at 5%, it cannot claim input tax credit. If it pays 18%, ITC is available.

Input Tax Credit on Ice Cream

Businesses dealing with ice cream can claim input tax credit on raw materials and expenses. This includes milk, packaging, machinery, advertising, and maintenance costs. ITC helps reduce the overall tax burden and supports better pricing.

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Conclusion

GST on ice cream mainly applies at 18% when sold as goods. Input tax credit is available in most cases, except under the composition or 5% restaurant scheme. Understanding these rules helps businesses stay compliant and avoid disputes.