The Authority of Advance Ruling (AAR) Karnataka ruled that the product ‘parota’ is classified under Chapter Heading 2106 however it is not khakhra, plain chapati, or roti, so 18% of Goods and Service Tax is applicable.
The Applicant, ID Fresh Food (India) Pvt. Ltd is a food products company involved in preparation & supply of a wide range of ready to cook, fresh foods including idli & dosa batter, Parotas, Chapatis, curd, paneer, whole wheat parota, and Malabar parota.
The applicant sought advance 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%.
GST rate of 5% is applicable to the products subject to fulfillment of the conditions that they should be classified under heading 1905 or 2106 and they must be either khakhra, plain chapati or roti. In the instant case, the first condition of classification is fulfilled as the classification of the impugned products has been resolved as 2106.
As for the second condition is concerned the impugned products are described as “parota” and hence are neither khakhra, plain chapati, or roti. Further the products khakhra, plain chapati or roti are completely cooked preparations, do not require any processing for human consumption and hence are ready to eat foods preparations, whereas the impugned products are not only different from the said khakhra, plain chapati or roti but also are not like products in common parlance as well as in respect of the essential nature of the product.
These products also require further processing for human consumption, as admitted by the applicant. Thus the benefit of entry No.99A of Schedule I to the Notification No.l/2017-Central Tax (Rate) dated June 28, 2017, as amended vide Notification No.34/2017-Central Tax (Rate) dated October 13, 2017 is not applicable to the instant case and the applicant is not entitled for the same.
The Authority consisting of members Dr. M.P. Ravi Prasad and Mashooq Ur Rehman Farooqui ruled that the product ‘parota’ is classified under Chapter Heading 2106 however it is not khakhra, plain chapati or roti, so 18% of Goods and Service Tax is applicable.
