In a win for one of Kerala’s favourite dishes, the Malabar Parotta is will not attract 18% GST anymore. The Karnataka Appellate Authority of Advance Ruling (AAAR) ruled that the 18% Good and Services Tax (GST) applicable on whole wheat parota (fried flat bread) and Malabar Parota is ‘void ab initio’.
Ready-to-cook food products maker ID Fresh Foods, which makes the popular ID Malabar Parota had approached the authority to clarify if the ‘preparation of Whole Wheat Parota and Malabar Parota be classified under Chapter heading 1905, attracting GST at the rate of 5%’.
The Karnataka appellate authority consisting of Judicial Member, D.P. Nagendra Kumar and Accountant Member, M.S. Srikar said that the ruling given by AAR wherein 18 per cent GST applicable on whole wheat parota and malabar parota is void ab initio on the grounds that it was vitiated by the process of suppression of material facts.
The AAAR, however, did not give a ruling on the issue whether the preparation of whole wheat parota and Malabar parota be classified under Chapter heading 1905, attracting GST at the rate of 5 per cent as the matter is pending in the proceedings.
Responding to the ruling, a spokesperson from ID Fresh Foods told TNM, “The correct amount of tax payable on parotta is either 0% or 5% as against the ruling of AAR indicating the rate of 18%. The AAAR has nullified the AAR ruling on a different point on jurisdiction. We will be following the due process of law in establishing the correct rate of tax payable on parotta (either 0% or 5%).”
The appellant contended that the parota is in ready to cook conditions. The parotas have a shelf life ranging from 3-7 days.
The contention was that these products are not frozen products but only needs to be refrigerated to retain its freshness for a shelf life of 7 days.
The company approached the AAR seeking a ruling on the issue of whether the preparation of whole wheat parota and Malabar parota be classified under Chapter heading 1905, attracting GST at the rate of 5 per cent.
The Authority for Advance Ruling (AAR, Karnataka) had earlier pronounced a ruling that ‘parantha (frozen / packaged) is different from plain roti and as such shall attract a higher rate of GST, i.e., 18 per cent instead of 5 per cent applicable to roti.
The AAR had in its order ruled that the product parota is classified under Chapter Heading 2106 and is not covered entry No. 994 of Schedule I, so 18 per cent of Goods and Service Tax is applicable.
In June, ‘HandsOffPorotta’ and other similar hashtags went viral on Twitter highlighting a news report that stated that Frozen Parottas attracted 18% GST as opposed to the earlier 5%, while ready-to-eat rotis/chapathis did not see a hike in GST.
With IANS inputs