Frozen ‘parathas’ cannot be taxed as ‘rotis’, to draw 18% GST

The Gujarat Appellate Authority for Advance Rulings (AAAR) has outlined {that a} frozen ‘paratha’ and a plain ‘roti’ or ‘chapati’ cannot be taxed in the identical method. In a latest improvement, Ahmedabad-based Vadilal Industries — which manufactures a spread of ‘parathas’ — was informed {that a} plain ‘roti’ or ‘chapati’ accommodates solely wheat flour and water, whereas frozen ‘parathas’ require heating earlier than consumption. Therefore, each the meals gadgets cannot be saved below the identical GST (items and providers tax) slab.

So as to add context right here, a plain ‘roti’ attracts 5 per cent GST, whereas frozen ‘parathas’ are taxed at 18 per cent.

“The parathas equipped by the appellant are totally different from plain chapati or roti and can’t be handled as or coated below the class of plain chapati or roti and applicable classification of parathas could be below Chapter heading 2106,” AAAR mentioned in a ruling dated September 15.

The appellate authority upheld the ruling given by the Gujarat bench of Authority for Advance Rulings (AAR) final yr that an 18 per cent GST price would apply to ready-to-cook or frozen ‘parathas’.

The producer (Vadilal) argued that the important thing ingredient of ‘paratha’ is wheat flour and may draw the identical GST price as ‘chapatis’.

Nonetheless, AAR acknowledged that ‘parathas’ aren’t prepared for consumption however require three-four minutes of cooking and that they aren’t just like ‘roti’ or ‘chapati’, that are primarily wheat flour merchandise. Wheat flour part in a ‘paratha’ varies between 36 per cent and 62 per cent, it added.

The controversy between ‘roti’ and frozen ‘paratha’ is likely one of the many disputes that the GST Council is presently going through.

GST was launched on July 1, 2017, which subsumed a dozen of state levies.

Additionally learn: Rs 824 crore GST fraud detected; ICICI Prudential amongst 15 insurance coverage companies below scanner

Additionally learn: GST collections up 26% in Sept; GST portal totally stabilised and glitch-free, says FinMin