How is KitKat not a Chocolate
Introduction
Take A Break, Take a Kitkat. We all have been hearing this tagline since our childhood and of course not to forget the creative advertisements in which the tagline is embedded. Now, we ask you to take a break and read the case of KitKat where it proved how it is not a chocolate but a wafer instead! Do let us know in the end whether you're convinced about the fact that it indeed isn’t a chocolate.
Biscuit vs Chocolate Story
The story dates back to 1999 when Nestle India Ltd. and Commissioner of Central Excise case, Kitkat was challenged to be a chocolate and not a wafer. At that time chocolate was taxed at 20% whereas biscuits were taxed at 10%.
What do the Tax Authorities say??
The tax authorities claimed that kitkat is a chocolate with a wafer inside. In fact, scrutiny of evidence collected and revealed that the product “kitkat” was predominantly made of milk chocolate covering wafers. The marketing of the product was also done as a chocolate, the officials said. Even when studies were conducted, almost 90% voted in the favor of it being a chocolate.
Nestle, to save on its tax, says that “while all chocolate must necessarily contain cocoa, it is not every cocoa product or a preparation that is chocolate”. Well, Nestle certainly does know how to play its cards!
How does it matter when it tastes delicious?
It does matter, as Nestle was trying to save a whopping 10% of difference in tax. Back then even though tax authorities have a strong dissent but Nestle proved it points and court termed it as a wafer. It was then to be taxed at 10%. Later on, the tax authorities slapped a duty of Rs 24 Crore on Nestle India, including a 100% misleading penalty of its product ‘Kitkat’ which results in paying lower rate of tax by the company.
References:
Comments
Post a Comment