The Gujarat Appellate Authority for Advance Ruling, on this dispute that has been going on for nearly 20 months, has ruled that 5 percent GST will be levied on roti, while 18 percent GST will be levied on paratha.
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5 percent GST on roti and 18% GST on paratha, This news came and the discussion started. How unfair is this! Roti is also made from flour, parathas are also made from flour. The difference is only between ghee, vegetable or edible oil, isn’t it? In practice, these things may seem normal. But there are arguments behind it as well as logic. Will talk about all the aspects, but first let us know the updates.
Actually, more than 5 years have passed since the GST system was implemented in the country, but many disputes related to it are yet to be decided. Among these controversies was a dispute related to Vadilal Industries Limited. The Gujarat Appellate Authority for Advance Ruling, on this dispute that has been going on for nearly 20 months, has ruled that 5 percent GST will be levied on roti, while 18 percent GST will be levied on paratha.
How old is the matter?
The dispute on which the Gujarat Appellate Authority for Advance Ruling has decided is 20 months old. One such case was also in Maharashtra. In that case, Maharashtra’s Authority of Advance Ruling, in its decision in the year 2018, had said that roti is known by different names in the country, but the rate of GST cannot be different due to the change of its name. At the same time, 20 months ago, Vadilal Industries had demanded 18 percent GST on parantha, for which the hearing was going on.
What did the company argue?
Ahmedabad-based company Vadilal Industries, while appealing in the authority, had said that the company makes eight types of parathas. These include Malabar, Onion, Fenugreek, Aloo, Lachha, Mixed Vegetable, Radish and Plain Paratha. These 8 types of parathas cannot be classified as roti or plain chapati. So the GST on it should be different.
Why high GST imposed on paratha?
Regarding this dispute, the traders argued that the main product used in roti and paratha is flour, but after a long battle of 20 months, the decision went in favor of the producer company Vadilal. The Gujarat Appellate Authority for Advance Ruling, in its decision, said that there is a clear difference between roti and frozen paratha. The authority said- “There is a huge difference between the products used in frozen parathas and roti. So the GST on this should also be different.
one more argument
The decision of the Gujarat Authority for Advance Ruling upholds that old decision. In June 2021, the authority had said that it takes 3 to 4 minutes to cook packaged parathas. It is cooked till it becomes golden brown from both the sides. Not only this, the amount of flour in the paratha remains between 36 to 62 percent. It is completely different from roti. So this decision seems logical.
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