Bombay HC Grants Interim Relief to Mad Over Donuts Parent Company in 5% vs 18% GST Classification Case [Read Order]

The Bombay High Court has granted interim relief to the parent company of the popular chain ‘Mad Over Donuts’, in its ongoing challenge to a ₹100 crore Goods and Services Tax (GST) demand raised by the Directorate General of GST Intelligence (DGGI).

The primary dispute is centred around whether donuts should be taxed at 5% or 18% under the GST regime - a decision which will have far-reaching impacts in the food industry considering the contemporary relevance of the popular snack.

Petitioner Himesh Foods Pvt. Ltd., had filed the present petition, against the Union of India - with the primary concern being regarding the classification of donuts supplied through bakery outlets and quick-service restaurants.

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By an order from March 2025, a Division Bench comprising Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla had directed the Union of India to file its affidavit-in-reply and clarified that no coercive recovery steps could be taken without due notice.

Himesh Foods contention is that donuts qualify as “ready-to-eat bakery products” and are liable to 5% GST, as applicable on other items that do not require further processing or service.

The DGGI, however maintained that donuts fall within the ambit of 18% GST, treating them as confectionery or dessert items served in restaurants.

Following the earlier order in March 2025, the case went through numerous procedural stages and deferments until the latest hearing on January 20, 2026.

The Bench was informed that the respondents had not yet completed their affidavit-in-reply as directed in the earlier order. Abhishek Rastogi appeared for the petitioner, and pressed for protection from coercive measures while the final determination of the classification issue was impending.

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The counsel also referred to a decision of the Court in Hindustan Coca Cola Beverages Pvt. Ltd. v. Union of India through the Ministry of Finance & Ors. (2025) and other authorities, wherein issues similar to those raised in the present Petition were under consideration, and the co-ordinate Bench admitted the petitions and granted interim relief in the nature of a stay on the impugned show cause notices.

It was further contended that the authorities could not have adopted an approach of itemised sale of the products to classify the same at 18%.

Appearing for the respondents, Jitendra Mishra did not raise any dispute as to the similar proceedings pending consideration before the court.

The Division Bench of Justice Aarti Sathe and Justice G.S. Kulkarni accordingly directed that interim relief be granted in the nature of a stay of the impugned order till the final disposal of the petition.

The petition was directed to be listed for final hearing along with companion matters on 26 February, 2026.

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