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GST: Paratha and Roti Are Different, One Attracts 18% Tax Rate, Another 5%, Says Gujarat AAAR

By: Business Desk

Edited By: Mohammad Haris

News18.com

Last Updated: October 14, 2022, 12:17 IST

New Delhi, India

The gross GST revenue in September stood at Rs 1,47,686 crore. (Photo: ShutterStock)

The gross GST revenue in September stood at Rs 1,47,686 crore. (Photo: ShutterStock)

Distinction between paratha and roti for the GST purpose has been made by Gujarat's Appellate Authority for Advance Ruling

Though paratha and roti have the same principal ingredients, they still attract different GST rates. The distinction between paratha and roti for the GST purpose has been made by Gujarat’s Appellate Authority for Advance Ruling (AAAR) on September 15 in its ruling. It has been clarified that paratha would attract 18 per cent GST, while chapati, roti and khakra will attract only 5 per cent.

In a recent ruling, it rejected an appeal by Ahmedabad-based Vadilal Industries against ruling by AAR in June last year. After over 20 months of the case, Vadilal has been told that paratha will attract 18 per cent, while roti, chapati and khakra will attract 5 per cent. Vadilal had appealed against an earlier AAR order for supplies of its eight varieties of paratha — mixed vegetable, Malabar, onion, laccha, aloo, mooli, methi and plain.

“The parathas supplied by the appellant are different from plain chapati or roti and cannot be treated as or covered under the category of plain chapati or roti and appropriate classification of parathas would be under Chapter heading 2106," the Gujarat AAAR said in its ruling on September 15.

The case is also similar to the ruling by Kerala AAR, which had ruled that classic Malabar parota and whole Malabar parota will be taxed at 18 per cent.

Meanwhile, the finance ministry recently said the cancellation of confirmed train tickets will now attract goods and services tax (GST). According to a notification issued by the finance ministry’s tax research unit, the cancellation charge for a first-class or AC coach ticket will now attract 5 per cent GST, which is the rate levied on the ticket.

According to the notification issued on August 3, the booking of tickets is a ‘contract’, under which the service provider (IRCTC/Indian Railways) promises to provide services to the customer. “When the contract is breached by the passenger, the service provider is compensated with a small amount, collected as a cancellation charge. Since the cancellation charge is a payment, and not breach of contract, it will attract GST," the notification said.

Moreover, according to the new GST rules effective from July 18, a GST-registered tenant needs to pay a goods and services tax of 18 per cent for renting a residential property. Earlier, only commercial properties like offices or retail spaces given on rent attracted GST. However, the tenant can claim the GST paid under input tax credit as a deduction.

According to the recommendations of the 47th GST Council meeting, tenants should pay an 18 per cent GST on a reverse charge basis (RCM) and they can later claim it as a deduction under the input tax credit.

At the end of June 2022, the 47th GST Council meeting decided to accept the group of ministers’ interim reports on the correction of duty inversion and exemption. Pre-packaged and pre-labelled retail packs, including curd, lassi and butter milk, were also brought under GST, effective July 18.

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first published:October 14, 2022, 12:10 IST
last updated:October 14, 2022, 12:17 IST
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