Refrigerated & Malabar Parota: Ktaka GST authority finds 18 percent slab void

Source :Sify
Author :Finance Desk
Last Updated: Mon, Oct 5th, 2020, 16:52:13hrs
Chapati Parota

Bengaluru: The Parota can heave a sigh of relief. At least consumers of refrigerated Parota and Malabar Parota can heave a momentary relief. That, after an appellate authority found the previous ruling of 18 percent GST as invalid or "void ab initio".

On Monday, the Karnataka Appellate Authority of Advance Ruling (AAAR) certified that the 18 per cent Good and Services Tax (GST) applicable on whole wheat parantha or parota (fried flat bread) and Malabar Parota was "void ab initio".

The Karnataka appellate authority consisting of Judicial Member, D.P. Nagendra Kumar and Accountant Member, M.S. Srikar invalidated the previous ruling owing to 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 was pending in proceedings.

ID Fresh Food (India) Pvt. Ltd approached the authority. ID Foods manufactures an assortment of ready to cook, fresh foods including idli/dosa batter, parotas, and chapatis.

The appellant's counsel said that their parota was made in ready to cook conditions and that the parotas had 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 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.

The Authority for Advance Ruling (AAR, Karnataka) had 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.

* With inputs from agencies.

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