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Frozen parota not staple food, to attract 18% GST, says govt

The Authority for Advance Ruling (AAR) bench of Karnataka had earlier held that frozen (and preserved) wheat and malabar parota, with a shelf life of three-seven days, was a "distinct product and not a plain roti"

twitter-logo BusinessToday.In   New Delhi     Last Updated: June 13, 2020  | 23:40 IST
Frozen parota not staple food, to attract 18% GST, says govt
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Just a day after the tribunal court's decision to uphold 18 per cent GST on parotas triggered a storm on social media, the government tried to cool the debate with an explainer. The government has said that all Indian breads can't be categorised as rotis (Indian flatbread) and the ready-to-eat parotas would be subjected to a higher tax of 18 per cent.

The Authority for Advance Ruling (AAR) bench of Karnataka had earlier held that frozen (and preserved) wheat and malabar parota, with a shelf life of three-seven days, was a "distinct product and not a plain roti". It has held that frozen and preserved parota would attract GST at the rate of 18 per cent compared to 5 per cent for rotis.

The ruling came after a Bengaluru-based food manufacturer sought clarity on whether parotas can be categorised in the same classification as khakhara, roti, or plain chapati.

The sources in the government told India Today TV that frozen parota, which is preserved, sealed, branded and is usually sold at higher prices can't be considered as a staple food for the poor. It is rather consumed by a class that could afford to pay taxes, they added. "It's not a staple item and is consumed by a class which could afford to pay taxes. And that is why, the ruling of 18 per cent GST on parota," added sources.

They added, "The rate of frozen and preserved parota was earlier discussed in the GST Council meeting. The council did not recommend the reduction of the GST rate on the frozen and preserved parota as these parota are sold by the organised sector."

Government, in order to present an example of how taxes vary on different products, said, "Milk under the GST regime is tax-free, but tetra packed milk is taxed at 5 per cent and condensed milk is taxed at 12 per cent. That is the differentiation the public has to make between rotis and parota served at restaurants or are frozen, packaged and sold in branded form by companies."

A govt official said that, "Poor do not buy frozen food items. Students and working youth depend on restaurants and takeaway eateries. The GST on them remains 5 per cent. The frozen stuff is popular among a segment which can pay taxes. Mass consumption items like biscuits, pastries, cakes, etc attract GST at the rate of 18 per cent."

The decision of a higher rate of GST on the parota had inspired a load of memes and jokes on social media channels with people even starting a "justice for parota" campaign.

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