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The roti vs parathas debate has just got reignited. The Gujarat bench of Authority for Advance Ruling (AAR) has held that preserved parathas are not the same as roti or chapati or khakhra and will come under the 18% GST category. The AAR held that the composition of paratha (wheat flour 36-62%) is different from that of khakhra or plain chapati. Vadilal Industries had approached the AAR seeking directions to subject parathas to a 5% GST rate as in the case of plain chapati.
Moreover, ‘paratha’ also requires further processing for human consumption.
Parathas are not ‘ready-to-eat food’ products and they require some cooking process like heating on a pan to make them ready for consumption, AAR noted.
“Hence, we find that the impugned product ‘paratha’ is not ‘khakhra, plain chapatti or roti,” according to a report in BusinessLine quoting the AAR ruling. The AAR classified products for the 18% GST category, the news report added.
Vadilal supplies eight varieties of paratha – Malabar, mixed vegetable, onion, methi, aloo, laccha, mooli and plain. The principal ingredient of all the varieties of it is wheat flour, while other ingredients are water, edible vegetable oil, salt, antioxidants, etc.
Parathas are supplied and sold in packed condition. Arguing that ‘paratha’ is not defined under the GST, Vadilal presented different definitions sourced from dictionaries. ‘Paratha’ is explained as “a flat, thick piece of unleavened bread fried on a griddle-origin from hindi Paratha,” according to one of the definitions.
Since preparation, cooking and consumption are similar to that of roti, paratha needs to be accepted as unleavened flatbread and chargeable to 5% GST, Vadilal submitted.
Rejecting the submission, GAAR ruled that paratha will be placed in a category “food preparations not elsewhere specified or included (other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods).”
According to cooking instructions on the Vadilal packets, the product needs to be heated on a medium flame for about 3-4 minutes. It also called for adding oil or butter during heating for adding to taste, AAR noted. It also distinguished between rotis and parathas on the basis of composition of wheat flour, which in case of parathas varied from 36% to 62%.
Earlier in June last year, the Karnataka bench of AAR had differentiated between plain chapati and the parotta. It had ruled that ready-to-eat parotta needs to be heated or further processed for human consumption and hence are liable for 18% GST.