Paratha is not roti - AAR ruling sparks debates across the country

The Authority of Advance Ruling in Karnataka has ruled that ready-to-eat paratha needs to be heated or further processed for human consumption and hence is liable for 18% GST sparking quite the debate on social media last week. Bengaluru based ID Fresh Foods had sought an advance ruling to understand whether the supply of whole wheat parathas and Malabar parathas would be classified under Chapter 1905 and attract a GST rate of 5%.

ID foods are in the business of manufacturing and supplying ready to cook products like idli and dosa batter and heat and eat products like parathas and chapatis.

The Authority for Advance Ruling in Karnataka held that 'heat and eat' parathas were not covered by any other heading under the HSN code system. Additionally, since the parathas needed to be processed before consumption viz. heat and eat, they should ideally be under the HSN code 2106 and not 1905, and the latter is meant for foods that are ready for consumption viz. cakes, pastries, etc. Code 1905 under the HSN system Harmonised classifies khakhra, plain chapati or roti, rusks, toasted bread under one category, for which a 5% GST rate is levied. But whole wheat parathas or Malabar parathas are not meant for direct consumption. They must be heated and thoroughly cooked before consumption. This fact significantly changes the essential nature of the product, and therefore it cannot be in the same category of products as khakras, rotis, toasted bread, etc.