Frozen 'parathas' can't be taxed as 'rotis', to attract 18% GST

The Gujarat Appellate Authority for Advance Rulings (AAAR) has outlined that a frozen 'paratha' and a plain 'roti' or 'chapati' can't be taxed in the same manner. In a recent development, Ahmedabad-based Vadilal Industries -- which manufactures a range of 'parathas' -- was told that a plain 'roti' or 'chapati' contains only wheat flour and water, whereas frozen 'parathas' require heating before consumption. Hence, both the food items can't be kept under the same GST (goods and services tax) slab.

To add context here, a plain 'roti' attracts 5 per cent GST, while frozen 'parathas' are taxed at 18 per cent.

"The parathas supplied by the appellant are different from plain chapati or roti and cannot be treated as or covered under the category of plain chapati or roti and appropriate classification of parathas would be under Chapter heading 2106," AAAR said in a ruling dated September 15.

The appellate authority upheld the ruling given by the Gujarat bench of Authority for Advance Rulings (AAR) last year that an 18 per cent GST rate would apply to ready-to-cook or frozen 'parathas'.

The manufacturer (Vadilal) argued that the key ingredient of 'paratha' is wheat flour and should draw the same GST rate as 'chapatis'.

However, AAR stated that 'parathas' are not ready for consumption but require three-four minutes of cooking and that they are not similar to 'roti' or 'chapati', which are primarily wheat flour products. Wheat flour component in a 'paratha' varies between 36 per cent and 62 per cent, it added.

The debate between 'roti' and frozen 'paratha' is one of the many disputes that the GST Council is currently facing.

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

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