GST Rules 5 Percent tax on roti but 18 Percent on paratha AAR explains why

GST Rules: It has been many years since the country GST came, but still many people have many doubts about its rates and rules. One such case has come to light from Gujarat, where Vadilal Company had challenged the different GST rates of roti and paratha in the court. After this, the Authority of Advance Ruling (AAR) has said in its decision that roti will be taxed at the rate of 5% and paratha at the rate of 18%. AAR has also given the reason for this. The Vadilal company had challenged the different rates of roti and paratha in the court saying that it makes 8 types of parathas. All of them mainly use flour. In mixed vegetable parathas, 36 per cent and in Malabar parathas, 62 per cent are made from flour. Roti is also made from flour and the method of eating both is almost the same. Despite this, paratha attracts 18 per cent tax, which is almost 4 times more than that of roti. Along with this, the company had demanded that only 5 percent tax should be levied on its parathas.

Court dismissed the application

The Gujarat Bench of AAR rejected the company’s request after hearing. The bench, while explaining its order in detail, said that roti is completely made of flour. In this, only water is used for kneading the dough, on which no tax is levied. Whereas paratha is made from oil. Roti is a ready-to-eat meal, which means that the roti can be eaten directly, whereas the Vadilal Parata is not ready-to-eat. The parathas being made by Vadilal Company are ready to cook. They have to be heated for 3-4 minutes before use.

18 percent tax on ready-to-cook items

The bench further explained that the company itself has written on its packets that while heating the parathas, add oil or ghee to it, by doing so they will become more tasty. It is clear from this that they cannot be eaten immediately i.e. they are ready to cook. Apart from this, the quantity of flour in it is also only up to 36 to 62 percent. For this reason, there is a lot of difference between roti and paratha. In the end, the court said that the company will have to pay tax on parathas only at the rate of 18 per cent.

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