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GST authority rules that packaged parotas are not rotis and they will attract 18% tax

The GST’s Authority of Advance Ruling (AAR) in Karnataka passed an order where they said that parotas are different from rotis, thus, they will attract 18% GST.

A bizarre taxation ruling has raised a debate on whether the parota can be categorized as roti or not, two popular flatbread that originated in the Indian subcontinent. In a recent ruling, The GST’s Authority of Advance Ruling (AAR) in Karnataka passed an order where they said that parotas are different from rotis, thus, they will attract 18% GST.

The curious case of Parotas vs rotis

A few months back, ID Fresh Food Pvt Ltd from Karnataka applied to the AAR under section 97 of the CGST Act, 2017. The company prepares and supplies a wide range of ready-to-cook foods like idli batter, parotas, curd, paneer, chapattis and more. In the application, the Advance Ruling Authority was asked if Malabar parotas and whole wheat parotas can be classified under Chapter heading 1905. If parotas is classified under chapter 1905, it will attract 5% GST.

The applicant suggested that parotas be considered in the said chapter similar to khakhra, chapatti and roti. In its ruling, AAR said that the items such as roti, bread, pastry, cakes, khakhra, wafers, etc. that are classified under Chapter 1905 are ready-to-consume. The consumers do not have to heat or cook any of these items before eating them. On the other hand, patoras are not completely cooked before packing and the consumer has to heat it. Thus, it is not possible to categorize it under the said chapter. AAR further said that packed parotas would attract 18% GST.

It is important to note that the ruling is for packed ready to cook parotas, and not for the ready to eat parotas we can buy from eateries.

Twitter erupted with quirky replies on the ruling

As soon as the ruling got published on social media, many users made fun of the ruling and posted quirky replies. Some users pointed out that the government has time to decide if parota is roti or not, but they cannot work on improving the country’s economy.

Anand Mahindra posted a tweet in which he asked if we should discuss parota during the crisis our country facing or not. Arun Bothra, who often uses his wittiness to raise important issues, said when his dietician told him parota is rich food, he thought she is talking about calories.

Fight over tax rates is not new

This is not the first time there has been an argument over tax rates on similar items. Before GST was implemented in India, the Delhi High Court had decided over the difference between chappal and sandal so that the customs department can decide duty on the product. 

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