‘Fryums’ is papad, to attract no GST: Gujarat AAAR

Gujarat Appellate Authority for Advance Rulings (GAAAR) has characterised ‘fryums’ as ‘ papad ’ thereby negating any attraction of GST on the food product. This ruling overturns the order of the Gujarat Authority for Advance Ruling (GAAR) which had held that fryums are not papad .

“‘Fryums’ is a popular word for different shapes and sizes like round, square, semi-circle, hollow circle with bars in between or square with bars in between intersecting each other or shape of any instrument, equipment, vehicle, aircraft, animal type papad . Similarly, calling a product in question of different shapes and sizes by fryums does not change the basic character of the product and the product in question remains papad ,” GAAAR said in its recent ruling on an appeal filed by Rajkot-based Jayant Food.

Same, yet different

It acknowledged that traditionally, ‘ papad ’ is a round-shaped, ready-to-cook product that is consumed after roasting or frying in oil as snacks or as an accompaniment with meals. The product in question, although of different shapes and sizes, is similarly a ready-to-cook product and can be consumed after roasting or frying in oil and consumed as a snack. Further, cereal flour is the ingredient in both products. “Both the products i.e. ‘ papad ’ and the product in question are the same except they are known by different names in general public i.e. as ‘ papad ’ and ‘fryums’,” it said.

GAAAR highlighted that in entry No. 96 of Notification No. 02/2017-CT (Rate) dated June 28, 2017, the description of the product is ‘ papad by whatever name called.’ Further, it said that to understand the term ‘whatever name called’ the principle of ‘ Noscitur a sociis ’ is to be applied. As per the said principle, the meaning of an unclear word or phrase must be determined by the words that surround it. In other terms, the meaning of a word must be judged by the company that it keeps.

Therefore, “in this entry, only a product called by name of ‘ papad ’ would not be covered but all types of product which are similar to papad in respect of ingredient, manufacturing process, use and common parlance would be covered irrespective of their shape and size and even name,” it said.

‘Different and distinct’

Earlier, GAAR had said that papad is a thing that is entirely different and distinct from fryums. Therefore, in common parlance or in the market, fryums are not sold as ‘ papad’ . Both the products are different and have their identity. Accordingly, in the common parlance test, the applicant’s products i.e. “different shapes and sizes of papad ” is not “ papad ” but is “un-fried fryums”. However, GAAAR ruled otherwise.

Also, it mentioned that “fryums” (of TTK Healthcare Ltd) is the brand name of a company and not the generic name of the impugned product. However, it is a popular word among the general public for the different shapes and sizes of papad .

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