GUJARAT AAR: READY TO COOK PARATHAS FACE 18% GST

The Gujarat bench of the Authority for Advance Ruling (AAR) has ruled that parathas will be subject to a goods and services tax (GST) rate of 18%.

The  verdict went against Vadilal Industries, an Ahmedabad-based manufacturer of branded parathas, who agrued that because rotis are subject to GST at 5% under HSN code 1905, the same should apply to parathas.

“Chapattis, rotis (fulkas), and parathas bear a close resemblance to one another, as not only the process of preparation or cooking, but also the manner of use and consumption are all the same and identical for all such products,” Vadilal had stated. A similar judgement by the Karnataka bench of the AAR, which had crippled the internet, was front-paged by TOI in June of last year. On Twitter, the hashtag #HandsoffPorotta was trending at the time.

In this case, the petitioner Vadilal Industries claimed to make eight different types of parathas, all of which contain whole-wheat flour as the main ingredient. In Malabar paratha, it may account for 62 percent of the components, whereas in mixed-vegetable paratha, it may account for 36 percent.

The Gujarat AAR bench attempted to differentiate between ready-to-eat food preparations such as ‘khakhra, plain chapatti, or roti,’ which fall under HSN code 1905 and attract the lower rate of 5%, and parathas, which require heating and are ‘ready-to-cook’ preparations.

“Heat over a medium burner for around 3-4 minutes,” according to the cooking directions on the Vadilal packages.

According to the AAR, it also recommended using oil or butter throughout the cooking process for added flavour and crispness. It also differentiate between rotis and parathas based on the wheat flour composition, which varied from 36 percent to 62 percent in parathas.