GST on Packed Paratha, says Gujarat AAR

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The debate over the rate of goods and services tax (GST) on food products is far from done. The Ready-Made parathas, which require to be heated prior to consumption, can not be similar to chapati, roti, or Khakra and would attract GST at the rate of 18%, the GAAR (Advance Ruling Authority of Gujarat) has said.

The matter was settled when a current appliance by Vadilal Industries that asked parathas to be subject to 5% GST. In chapatis or roti, GAAR said that parathas are dissimilar from the structure, chapati/roti, Khakhra/plain. Additionally, the parathas also necessitate further processing for personal consumption as confessed by the candidate himself Thus, this article gives information about 18% GST on Packed Paratha in detail.

The debate of GST on Packed Paratha 

The applicant (Ahmedabad-based manufacturer of branded parathas, Vadilal Industries) provides 8 kinds of parathas –Mixed Vegetables, Malabar, Fenugreek, Onion, Lachha, Radish, Potato, and Plain. Parathas are mainly sold and offered in packed form. Thus, The applicant submits that parathas are usually consumed with curries in the household, similarly as Phulkas, chapatis, or roti are eaten with pickles, vegetables, meat, etc. So, the applicant suggests that the  Packed Parathas should be under HSN Code 1905. It also said that since cooking, preparation, and eating are similar, paratha must be paired with chapati and roti, which is approved as unleavened flat roti and has  GST Rates of 5%.

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Definition of Pratha by AAR as per GST Registration Regulations

The range of ‘Parantha’ offered by the candidate is not ‘ready to consume’ or ‘ready to eat’ goods; however, they are foodstuffs that need a few ‘cooking procedures’ to be processed into ‘edible food.’ To be ‘prepared for consumption,’ according to the cooking information printed on the stuffing cover of these foodstuffs, they require heating on a Tawa and preheated pan for three to four minutes. Thus, we acquire that the disputed merchandise ‘paratha’ is not plain chapati, ‘khakhra, or roti.’

Gujarat’s AAR Ruling for GST on Packed Paratha

GAAR did not have the same opinion with these submissions and considered that parathas will be placed in a  separate category such as “food training not somewhere specific or incorporated (including sweet, roasted chana, Namkeen, idli/dosa batter, Bhujia, chana, mix). Thus, Businesses dealing with Packed Parathas will need to do GST Registration and GST Return Filing as per their eligibility criteria.

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If you want any other guidance relating to the GST Registration, please feel free to talk to our business advisors at 8881-069-069.

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