18% GST On Frozen Parottas: Government Sources Explain Why

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 Government Sources Explain Why

The parotta vs roti matter had drawn strong reactions from social media users.

New Delhi:

The ordinary or any parotta served by restaurant for eating there or for takeaway would be taxed at a GST rate of  5 per cent just like the plain roti, government sources said a day after social media users debated the government's move to put frozen parotta on a higher bracket than roti under the goods and services tax or GST.

The 18 per cent GST would thus apply to frozen parottas that are preserved, sealed and packed and not the fresh parottas served at restarurants. Frozen parottas are "consumed by the class which could afford to pay taxes", government sources said on Saturday.

"It may be noted that frozen parota is preserved, sealed packed, branded and is usually sold at higher prices. It is not a staple item and is consumed by the class which could afford to pay taxes. Even items like cheaper biscuits, pastries, cakes, etc., attract GST at the rate of 18%. Frozen food would be more comparable to such item. Frozen foods cannot be comparable to plain roti or plain parota served in restaurants or taken as staple food, or eaten by poor on day-to-day basis (sic)," government sources said.

A Bengaluru-based food manufacturer  was told by a special court - the Karnataka bench of the Authority for Advance Rulings - that its products, whole wheat parotta and Malabar parotta with a shelf life of three to seven days , were not ready-to-eat as they needed to be heated before they are consumed, meaning they will continue to be taxed at 18 per cent.

"...such frozen and preserved parota is not a like product when compared to plain roti, khakra, etc. Also, this order does not decide the rate of ordinary plain parota. The ordinary or any parota, served for consumption by a restaurant, or a take away, would attract 5% GST rate just like plain roti," government sources said.

Government sources pointed out that it is a standard practice globally to tax processed or packaged food at a higher rate, citing examples such as that of tetra-packed milk and condensed milk.

The matter had drawn reactions from social media users, including industrialist Anand Mahindra. #HandsOfPorotta was one of the top trends of Twitter on Sunday.

Some people alleged the different tax brackets were an example of "cultural racism", with many saying roti is mostly consumed in northern India and parotta in the south, while others said it is simply a matter of taxing products under the right categories and such allegations should be avoided.

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