The Directorate General of GST Intelligence (DGGI) has demanded approximately ₹100 crore in tax dues from Mad Over Donuts and other bakery chains, seeking an 18% GST on the sale of donuts and similar bakery items.  

The central issue before the Bombay High Court is whether the sale of donuts, which are offered for both dine-in and takeaway, should be classified as restaurant services—taxed at 5%—or as bakery products, which may attract up to 18% GST.  

Counsel for the petitioner argued that the supply of food and edible items qualifies as a composite supply of services under the Central Goods and Services Tax (CGST) Act. Advocate Abhishek Rastogi cited GST rate notifications that explicitly include food supplied at restaurants, eating joints, messes, and canteens, regardless of whether it is consumed on-site or taken away. He also referred to a government circular affirming that takeaway services fall under restaurant services and should be taxed at 5%.  

Additionally, he raised procedural concerns regarding the issuance of a centralized show-cause notice (SCN) by the DGGI, which covers multiple territorial jurisdictions. He contended that separate notices should be issued for each GST registration instead of consolidating them into a single notice to ensure clarity and fairness in the tax proceedings.  

Counsel for the DGGI assured the Court that no recovery notice had been issued against Mad Over Donuts so far. The Court accepted this as an undertaking and noted that the petitioner’s concern regarding recovery action was unfounded.  

The matter is scheduled for further hearings on March 24, with the respondent tax authorities required to file their affidavit by March 17.  

Advocates Abhishek Rastogi, Aarya More, Pooja Rastogi, and Meenal Songire appeared for the petitioner.  

Advocates Jitendra Mishra and Sangeeta Yadav represented the Additional Director-DGGI and the Assistant Commissioner-DGGI.  

Advocates Satyaprakash Sharma and Suman Kumar Das appeared for the Union of India.