Case Details:

Vadilal Industries Limited

Appeal No.:

Advance Ruling No. GUJ/GAAR/R/20/2021

Ruling pronounced by:

GST AAR Gujarat

Date of Ruling:

30-06-2021

The applicant M/s Vadilal Industries Limited is engaged in the production and sale of various varieties of Paratha namely Malabar Paratha, Mixed vegetable Paratha, Onion Paratha, Methi Paratha, Alu Paratha, Lacchha Paratha, Mooli Paratha, and Plain Paratha. The principal ingredient of all the varieties of Paratha is wheat flour. The other ingredients are water, edible vegetable oil, salt, antioxidants, etc. Parathas are supplied and sold by them in packed condition are to be placed directly on a pre-heated flat pan for about 3-4 minutes before consumption.

The applicant submitted that chapati is a flat unleavened bread of Indian origin and so is paratha; that both chapatti and paratha are cooked on a griddle; that the method of cooking and also the way of consumption by people at large are similar; therefore, unleavened bread like chapatti and paratha fall for classification under HSN Code 1905 and consequently under Tariff item No. 1905 (subheading No. 19059090) of GST Tariff and thus chargeable to GST @ 5%.

Question on which Ruling is sought:

• Whether the products viz. ‘Paratha’ i.e. various varieties of Paratha produced by applicant merit classification under HSN Code 19059090
• Whether the product, namely, ‘Paratha’ i.e. all varieties of Paratha produced by the applicant are chargeable to 5% GST under Sl. No. 99A of Schedule-I of Notification No. 1/2017- CT (Rate) and Notification No. 1/2017- IT (Rate) dated 28-06-2017.

Entry at Sl. No. 99A of Schedule-I to the Notification No. 01/2017- CT (Rate) as amended from time to time, specifies that GST rate of 5% shall be applicable on the goods covered under heading 1905 or 2106 having description as “Khakhra, plain chapatti or roti”. In the issue in hand, we find that the first condition of classification is fulfilled as the product ‘Paratha’ has to be classified under heading 2106.

Khakhra, plain chapatti, or roti are cooked preparations that do not require any processing for human consumption and hence are ready to eat food preparations whereas the ‘Paratha’ is not only different from the ‘Khakhra, plain chapatti or roti’, but are also not ‘like products’ in common parlance. The composition of paratha (wheat flour 36% to 62%) is different from the composition of khakhra/plain chapatti/ roti. Moreover, ‘paratha’ also required further processing for human consumption as admitted by the applicant themselves. Hence, ‘Paratha’ is not ‘Khakhra, plain chapatti or roti’. We hold that the said Entry No. 99A of Schedule-I to the Notification No. 01/2017- Central Tax (Rate) dated 28-06-2017 is not applicable for ‘Paratha’.

We classify ‘Paratha’ at HSN 2106. Now as there is no mention of the entry ‘Food preparations not elsewhere specified or included” (heading 2106) in the six schedules of the Notification No. 01/2017- CT (Rate) dated 28-06-2017, we hold that the “paratha’ product would be covered under Entry No. 453 of Schedule-III of the said Notification (up to 14-11-2017) which covers goods that are not specified in Schedule I, II, IV, V or VI of the above notification.

We hold that the product ‘Paratha’ of the applicant will be covered under: (i) Entry No. 453 of Schedule-III of Notification No. 01/2017- Central Tax (Rate) dated 28-06-2017 for the period from 01-07-2017 to 14-11-2017 and (ii) Entry No. 23 of Schedule-III of Notification No. 01/2017- Central Tax (Rate) dated 28-06-2017 (as amended by Notification No. 41/2017- Central Tax (Rate) dated 14-11-2017) with effect from 15-11-2017 and will be liable for GST @ 18%.