new Delhi. The Central Board of Direct Taxes and Customs has clarified after reports of GST on parathas coming in many parts of the media. According to the CBIC, the Authority of Advance Ruling has ruled that frozen or preserved parathas cannot be treated as food items like bread or khakra. The AAR considers GST matters. According to the authority, such wheat paratha and Malabar paratha have a shelf life of 3 to 7 days and is different from mango roti which is fully cooked and prepared.
According to the AAR, frozen parathas cannot be kept at lower GST rates on behalf of mango roti or similarly prepared items. Because it needs to be further processed before eating, nor are these essential foods. In such a situation, it will attract Goods and Services Tax (GST) at the rate of 18 percent.
In fact, Bangalore-based company ID Fresh Foods had applied before the Karnataka bench of AAR to ask for GST rate on whole wheat parantha and Malabar parantha. The company sells ready-to-cook products such as idli, dosa, parantha and chapati. The AAR has stated in its conclusion that there is no specific entry regarding the Paratha in the Customs Duty Act or GST duty. The AAR stated that a GST rate of 5 percent would apply to products that fall under the 1905 or 2016 title. Such products are khakhara, plain chapati and roti. Parantha 2016 falls under the title. It is neither khakhara, nor plain chapati or roti. AAR said that Khakhara, plain chapatti and roti are fully prepared ingredients. There is no need to prepare them for consumption. Parantha or Malabar Parantha is different from these products. Apart from this, they are also not products of common consumption and of essential nature. These require further processing or preparation for human consumption.
Rajan Mohan, senior partner, AMRG & Associates, said that the tax difference of these products is 13 percent, which has led to controversy over the classification of roti and parathas. The ground reality is that these words are used in the same way in the common Indian language.
This post was published on June 13, 2020 2:31 am
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