2018 (11) TMI 279 – AUTHORITY FOR ADVANCE RULINGS, KERALA – 2018 (18) G. S. T. L. 837 (A. A. R. – GST) – Classification of goods – Classic Malabar Parota – Whole Wheat Malabar Parota – whether classified as bread classifiable under Heading 1905 and eligible for GST exemption or not – exemption from GST vide N/N. 2/2017 – Central Tax/ SRO No.361/2017.
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Held that:- Bread is a staple food prepared by cooking dough of flour, water and yeast. Whereas parotta is prepared by using ghee or oil. The dough is rolled out and brushed with ghee or oil then folded again, brushed with more ghee and folded again. This is then rolled out to a circle and cooked on a buttered griddle. The heat makes the layers of dough puff up slightly, resulting in a more flaky texture – As per entry 97 of Notification No.2/2017 – Central Tax / SRO. No.361/2017, only specific commodity ‘Bread branded or otherwise’ covered under HSN 1905 is eligible for exemption.
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As there is substantial distinction between
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ntral Tax/ SRO No.361/2017 is applicable only for specific commodity ‘Bread branded or otherwise’ covered under HSN 1905. – AAR No. KER/23/2018 Dated:- 12-10-2018 – 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 is a food product made with maida (fine wheat flour). This literally means layers of cooked dough. Concis
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leavened, 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 is a staple food prepared by cooking dough of flour, water and yeast. Whereas parotta is prepared by using ghee o
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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 heading does not need an interpreter, absolute sententia expositore non indiget. The case pointed out by the petitione
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