Preserved parathas, which needs to be heated before consumption, cannot be similar to roti, chapati or khakra and will attract GST at the rate of 18 per cent, Gujarat’s Appellate Authority for Advance Ruling has upheld.
In a recent ruling, it rejected an appeal by Vadilal Industries against ruling by AAR in June last year. This is similar to ruling by Kerala AAR which had held Classic Malabar parota and whole Malabar parota to be taxed at 18 per cent, but different from Maharashtra AAR and Karnataka AAAR. While Maharashtra AAR ruled parota to be clubbed along with khakhra, plain chapati or roti and attract concessional duty, Karanatka AAAR invalidated previous ruling about applicability of 18 per cent GST on parotas. However, it did not say what rate these parotas will attract.
In the present matter, taking note of instruction mentioned on packaging, Gujarat AAAR observed that the process of 3-4 minutes of heating amounts to cooking of the parathas as the color of the parathas changes and the frozen parathas become ready for consumption. “As compared to roti or chapati or items falling under chapter heading 1905, which are ready to eat and does not require any further processing before consumption, the appellant’s products have to be cooked before the same can be consumed,” the AAAR said and disposed the appeal.
Appellant supplies eight varieties of paratha – Malabar, mixed vegetable, onion, methi, alu, laccha, mooli and plain. The principal ingredient of all the varieties of it is wheat flour, while other ingredients are water, edible vegetable oil, salt, antioxidant, etc. These are supplied and sold in packed condition. These are commonly and ordinarily eaten in households with curies, the way chapati or fulka or roti are consumed with vegetables, pickles, meat, etc.
However, on the appellant’s contention paratha similar to roti or chapatti, the bench said they found one common ingredient among these that is wheat flour (36 to 62 per cent depending upon the type of paratha), apart from water. “It is clear that on the basis of ingredients used in the appellant’s product and roti or chapati, composition of both are very different from each other,” the bench said.
Further, it said that even the plain paratha apart from whole wheat flour and water contains margarine, salt, emulsifying agent, edible vegetable oil and bread improver. Further roti or chapati is consumed directly but the parathas manufactured and supplied by the appellant requires to be cooked before the same can be consumed. “We therefore find that parathas supplied by the appellant, will not fall under the category of roti or chapati,” it said.