In Re: M/s. Modern Food Enterprises Pvt. Ltd.
GST
2018 (11) TMI 279 – AUTHORITY FOR ADVANCE RULINGS, KERALA – 2018 (18) G. S. T. L. 837 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, KERALA – AAR
Dated:- 12-10-2018
AAR No. KER/23/2018
GST
SHRI. B.G. KRISHNAN IRS AND SHRI B.S. THYAGARAJABABU B.Sc., LLM, MEMBER
Authorized Representative: Adv. Lalitendra Gulani
Applicant is a manufacturer of 'Classic Malabar Parota' & 'Whole Wheat Malabar Parota'. The major ingredients are wheat atta, Edible vegetable oil, Milk solids, Sugar, Salt, Yeast etc. According to them, these products qualify as bread classifiable under Heading 1905 and eligible for GST exemption. Hence the applicant requested advance ruling on the following:
i) Classification of 'Classic Malabar Parota' and 'Whole Wheat Malabar Parota'.
ii) Eligibility Of exemption from GST vide Notification No. 2/2017 – Central Tax/ SRO No.361/2017.
The authorized representative was heard. It is stated that 'Parotta
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lour, Edible vegetable oil, Milk solids, Sugar, Salt are in the nature of Parotta. 'Classic Malabar Parota' is unleavened, 'Whole Wheat Malabar Parota' is leavened with yeast. The impugned goods being in the nature of parotta qualify as flatbread, sold in packed form. In Kayani & Company v. CST [AIR 1953 Hyd 252] Karnataka High Court = 1953 (3) TMI 17 – HYDERABAD, HIGH COURT observed that, term 'bread' includes all forms of bread which are prepared by moistening, kneading, baking, frying or roasting meal or flour, with or without addition of yeast. Therefore parotta is a variant of bread squarely covered under entry 97 of Notification No.2/2017 – Central Tax/SRO. No.361/2017. Moreover the FSSAI certification classified these items as bread. It is also stated that bread is a general entry which forms d genus, comprising of various species within its ambit. Therefore parotta is a species of bread and the same is eligible for exemption.
The authority examined the case meticulously. Bread
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hem are used as food. Therefore the exemption given to the pecific commodity under GST tariff 'Bread branded or otherwise' is eo nomine exclusively covered under HSN 1905. It has no wider scope to incorporate different food stuff prepared using wheat flour.
As per Schedule III of GST Laws, vide Heading 2106 'Food preparations not elsewhere specified or included' is taxable @18% GST. There is specific exclusions from this heading, for 'Khakhra, Plain Chapatti or Roti, Idli / Dosa batter, and included under 5% category. Even though 'Chapati' is unleavened flatbread prepared from whole wheat flour or maida, it is specifically included under heading 2106 and reduced the tax rate from 18% to 5%.Therefore the word 'Food Preparations' connotes preparations for use, either directly or after processing such as cooking for human consumption. Therefore all food preparations which are not specifically mentioned in any other entry squarely comes under Heading 2106. The plain language used in the h
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