The decision of the Gujarat Authority for Advance Ruling levying the GST of over 18 percent on parathas has made restaurant owners furious. The AAR stated that 18 percent GST will be levied on packaged frozen packs of wheat and Malabar paratha.
The restaurants are up in arms with the Authority for Advance Ruling (AAR) over levying of 18% GST on paratha or parathas. The AAR ruled that 18% GST will be levied on the wheat packaged paratha and Malabar paratha which are frozen packs.
The reason behind levying a GST on frozen parathas is that since the food item is frozen, it is preserved and serves a shelf life of 3-7 days. Moreover, it is sold in branded packs at a higher price hence 18 percent tax has to be paid on the product.
The matter is not yet up for debate so one is obliged to pay the GST on frozen packed parathas.
The current charge of GST for Roti and parathas served in restaurants is 5 percent as it is freshly cooked and not frozen, preserved, and not sold in expensive packs.
The AAR’s is not talking about roti or paratha, but rather frozen, packed parathas, which are sold at a higher price. It cannot be compared to roti which falls under the 5% GST category and so it is acceptable to levy 18% GST on the item. Moreover, even biscuit packets, pastry, and cake which are made of wheat, also attract 18% GST. So, processed and packaged food items are subject to higher tax due to the category they are placed under.
From the current situation, it is likely that the government will keep the frozen paratha within the 18 percent tax bracket