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  • Writer's pictureAccounString Management Private Limited

McDonald's Food War!!!

FMCG businesses are generally in classification disputes to save taxes. McDonald's is one of them who went on war with Excise Dept. to prove that Soft-serve is not an Ice-cream but a dairy product!!

It was argued that ‘soft serve’ cannot be referred to as "ice-cream" even by applying the common parlance test, in as much as ‘soft serve’ is sold throughout the world not as “ice-cream” but only as ‘soft serve’. "Ice- cream", the world over, is commonly understood to have milk fat content around 10% whereas ‘soft serve’ does not contain milk fat of more than 5%.

The court dismissed the company's argument. Rejecting this claim, the court said that such a hard and fast definition of a culinary product like ice-cream, which has seen constant evolution and transformation, is untenable.

The Supreme Court has ruled that the 'soft serve' sold at McDonalds India's outlets should be classified as ice-cream for the purpose of determining excise duty, upholding the excise department's claim.

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