18% GST applicable to Whole Wheat Malabar Parota: AAR [Read Order]

Malabar Parota - Taxscan

The Advance Rulings Authority (AAR), Kerala has held that 18 percent GST is leviable on the Whole Wheat Malabar Parota.

The authority was considering an application filed by the manufacturer of ‘Classic Malabar Parota’ & ‘Whole Wheat Malabar Parota wherein they sought for a clarification on the product ‘Classic Malabar Parota’ & ‘Whole Wheat Malabar Parota.

According to the applicants, these products qualify as bread classifiable under Heading 1905 and eligible for GST exemption.

The authority noted that the Bread is a staple food prepared by cooking dough of flour, water, and yeast. Whereas parotta- is prepared by using ghee or oil.

“As per entry 97 of Notification No.2/2017 – Central Tax / SRO. No.361/2017, only specific commodity ‘Bread branded or otherwise’ covered under HSN 1905 is eligible for exemption. When we apply “commercial parlance test” and in fact ask someone to bring the bread from the market, he will never bring parotta. There is an open market of the commodity where the commodity is commonly traded and the common man who knows the goods according to the meaning given to them in normal usage. As there is a substantial distinction between bread and parotta, in preparation, use, taste, digestion, even though both of them are used as food. Therefore the exemption is given to the specific commodity under GST tariff ‘Bread branded or otherwise’ is eo nomine exclusively covered under HSN 1905. It has no wider scope to incorporate different foodstuff prepared using wheat flour,” the authority said.

After hearing the contentions, the authority said that ‘Classic Malabar Parota’ and ‘Whole Wheat Malabar Parota’ classified under Schedule III of GST Laws, vide Heading 2106 ‘Food preparations not elsewhere specified or included’ and is taxable @18% GST.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

taxscan-loader