The Subway Food Chain of USA, which is among the largest Food Chains operating in over 110 countries, faces yet another controversy over its bread. The Five-Judged Court of Ireland ruled that the Subway bread has too much sugar to qualify as a staple food and hence cannot be exempted from tax.
According to The Value Added Tax (VAT) Act of 1972, the staple food of Ireland like bread is exempted from taxes. Mr. Justice Donal O’Donnell said that the definition of “bread” in the act marks the difference between bread as a staple food, which is 0pc rated and any other baked food made from dough. Clearly, Subway bread failed to fall into the category of “Bread as a staple food.”
Ruling from the Irish Court came when Bookfinders Ltd., an Irish Franchise of Subway claimed a refund from the Revenue Commissioners of the Tax it had paid in the year 2004-2005. The Franchisee argued that it was not liable to pay taxes on its takeaway products like tea, coffee and bread. The case was dismissed by the lower courts till it was presented before the Supreme Court. Here, the court held by 5 judges passed the sentence that deemed the Subway bread as a “Confectionery” and not a “Staple Irish Food”.
The court said the bread is too sugary to be called a staple food. According to the statutory definition of the “Bread” in the Act, Sugar and Fats together should not be more than 2% of the flour in the dough and only then will the bread qualify as a “Staple Food” and will be exempted from VAT. On the contrary, the heated bread of Subway has a 10% sugar weight, far more than the prescribed weight. According to the Nutrition Facts posted by Subway, its 6-inch white bread role has about 5g of sugar which is as much sugar as in 2 cookies. It is on this ground that the Subway Bread is now labelled as a confectionery in Ireland starting today, i.e, 1st October, 2020.
Before this, Subway had faced another bread controversy in the year 2014 when a Food Blogger along with thousand others had signed a petition for Subway to remove Azodicarbonamide, a flour whitening agent used by Subway in making of its bread. Subway had removed the chemical immediately.