18% GST on Frozen Parathas Now Says GAAR

Paratha is a hot topic nowadays not because it is everyone’s favorite food but for falling into the 18% GST category.

Yesterday, The Gujarat bench of AAR upheld the decision of the Karnataka bench of the Authority of Advance Ruling.

It said, parathas are not like chapati or roti and thus cannot be listed under the category of 5%GST as per the new rules.

The verdict of GAAR is now attracting criticism and trolls from the public and also the Delhi CM Arvind Kejriwal.

He said,” Even the British did not impose a tax on food items.”

Public Opinion on New GST Rule on Parathas

Looks like the new decision on GST has disappointed the public a lot. Some users on Twitter are even expressing their anger and criticizing Finance Minister for it.

If U don't want to pay 18% GST on
Paratha Eat 'Sambar Vada' or 'simply Idly' (only 5%)like me! I never eat#Paratha my self ' Finance Minister
Smt Nirmala Sitharaman may Quip
Regarding ' Paratha Loot '#NirmalaSithraman pic.twitter.com/u0W1sBA07F
— MTvalluvan (@MTvalluvan) October 14, 2022

18% GST on paratha 5% GST on Roti and Chapati

Meanwhile Indians: pic.twitter.com/WMCBIM78ML
— akanksha (@akankshaguru2) October 14, 2022

Nirmala Sitharaman is on Diet .

She doesn’t eat Paratha , thus 18% GST on Paratha .
— Reshma Alam (@reshma_alamD) October 14, 2022

माँ- पराठे खाओगे?

राहुल- हाँ खाऊँगा।

मोदी- 18% GST लगेगा।

राहुल- फिर तो रोटी दे दो।

मोदी- उसपे 5% GST लगेगा।

राहुल- साँस लेने पे भी GST लगेगा क्या?

मोदी- सोच के बताता हूँ। #Paratha #Roti #ModiHaiToMumkinHai
— Rahul (@imRahul_918) October 14, 2022

After 18℅ GST..

Paratha pic.twitter.com/P7ZN5lwtMw

— sajid (@helpless12345) October 13, 2022

Why 18%GST on Parathas?

The whole verdict is on ready-to-eat parathas products and not the regular ones at restaurants or food stalls.

Vadilal Industries Ltd which sells frozen parathas of different flavors is the appellant in this case. They have been against the decision ever since the new GST rules came into effect.

The Appellant Side

The Ahmadabad-based manufacturer and supplier said the base product of parathas is wheat flour same as chapatti. Thus, it should fall into the category of 5% GST.

There is more to this conclusion. Ready-to-eat parathas are no different from products ready for consumption mentioned in Heading 1905 of the HSN Code.

Similar to pizza bread or toasted bread, frozen parathas also require cooking and heating prior to eating. Therefore, they are eligible for 5%GST rather than 18%.

AAAR Side

According to the AAAR, roti and parathas are different due to their composition as vegetables and other ingredients are also used.

Moreover, one has to cook or heat frozen parathas before consuming them which is otherwise in the case of roti. Thus, the product meets the classification of HSN 21069099 which attracts 18%GST.