#HandsofPorotta

#HandsofPorotta

This is one of the trending hashtag in social media. Why? Because of reports that porotta has been put in 18% GST bracket by authorities.

So, I thought I should read about this very interesting ruling which was made on 22^nd May 2020, and understand why such a decision was taken! And here are my 3 points!

1)     The ruling was made by Authority for Advance Ruling (AAR) against an applicant made by ID Fresh (Lets call ID Fresh as Applicant).

Who is an AAR?

AAR is an authority under GST who provides certainty in tax liability in advance and also classification of any goods or services under GST.  

Whom does this ruling applicable?

This ruling is applicable only to Applicant. In this case ID Fresh. This also means such advance rulings will not be applicable to similar tax payers in the state.

2)     What was the issue under AAR or rather what was the application made by the applicant?

The applicant was wanted to classify its “Ready to cook porotta” as Kharkara Plain Chapathi, or Roti , or under another classification as  “Prepared Food Stuff”. – both the classification under 5% tax rate.

3)     What was the judgement?

The authority ruled that Packed ready to cook porotta is not a prepared food stuff as it has further human intervention to make it consumable. The authority also ruled that the classification “Kharkara, Plain Chapathi or roti” will be not applicable as it means cooked roti or chapathi, again a “Packed ready to cook Porotta” is not a cooked food.  Hence the product is classified under “Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption” which is under 18% GST rate.

Again, this ruling is applicable only to ID Fresh and not to any other person. This ruling is made upon by an application made by the company. There is news that ID Fresh will be moving to Appellant Authority.

I hope this has cleared all misunderstanding about the news heading you being hearing .

Here is the link for the whole ruling

https://taxguru.in/goods-and-service-tax/gst-preparation-whole-wheat-parota-malabar-parota.html