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Round vs square! The shape of papad triggers GST debate

Round vs square! The shape of papad triggers GST debate

“Pappad, by whatever name it is known, except when served for consumption,” states the GST notification

Papad is exempt from GST, said CBIC Papad is exempt from GST, said CBIC

The Central Board of Indirect Taxes & Customs, in a reply to RPG Enterprises Chairman Harsh Goenka, said that the Goods and Services Tax (GST) does not distinguish papad based on its shape. The tweet was in reply to Goenka’s post that papads are taxed differently based on whether it is round or square.

“Papad, by whatever name known, is exempt from GST vide Entry No. 96 of GST notification No.2/2017-CT(R). This entry does not distinguish based on the shape of papad. This notification is available at http://cbic.gov.in,” stated the tax board.

The GST notification issued by the Ministry of Finance on June 28, 2017 states that certain items will be exempted from GST as the government is “satisfied that it is necessary in the public interest so to do” on the recommendation of the GST Council. In that list of 149 items is papad. “Pappad, by whatever name it is known, except when served for consumption,” states the notification.

The response comes to Goenka’s tweet that posted two images of round and square papads. “Did you know that a round papad is exempt from GST and a square papad attracts GST ? Can anyone suggest a good chartered accountant who can make me understand the logic?,” stated Goenka.

Some netizens pointed out to Goenka that that’s not the case.

However, last week a Gujarat bench of the Authority for Advance Ruling stated that papads of all shapes will not attract GST as they are homemade. Papad is made with flour, salt, oil and spices. But fryums that are made with flour and additives will attract GST. In a months-old case of Sona Products, the Gujarat AAR had stated that fryums will attract 18 per cent GST.

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