Highlights:
- Wadilal Industries demands 5% GST on parathas
- The company’s claim was rejected by the Authority of Advance Ruling
- The company’s chapatis are ‘ready to eat’ but the parathas are ‘ready to cook’
What’s the matter?
Wadilal Industries, a Gujarat-based company that manufactures branded parathas, had filed a petition seeking 5 per cent GST on parathas instead of 18 per cent. According to the HSN code 1905, 5 per cent GST is levied on goods, so the same rate should be applied to parathas, the company said. The company also said that there are similarities between chapati, beehive, khakra and paratha. The company claims that the process of making all these products is similar and the method of use and consumption is the same. However, Gujarat AAR has disproved this claim.
The company claims
According to Wadilal Industries, the company makes eight different types of parathas. It mainly uses wheat flour. Wheat flour is 62% in Malabar Paratha and 36% in Mixed Vegetable Paratha.
Company’s parathas ‘ready to cook’
However, Gujarat AAR clarified the gap between khakra, chapati and paratha in its decision. According to the authority, the chapatis are ready to eat, while the company’s paratha is ready to cook. Wadilal has instructed on his packet of ready-to-cook parathas to ‘heat over medium heat for three to four minutes’. Also, it is recommended to spread oil or butter on the paratha to make it crispy and tasty. The authority also said that the proportion of wheat flour in parathas is 36 to 62 per cent.
Therefore, even though 5 per cent GST is levied on ready-to-eat chapatis, the decision to levy 18 per cent GST on ready-to-cook parathas is appropriate, the Authority of Advance Ruling said.
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