GST on Roti and Paratha

GST on Paratha has been a much-talked-about and contested issue for Indian consumers. GST on roti and Paratha have different charges due to their varying nature. Let’s look into the details of GST on Paratha in this article and the CBIC GST rate.

What is GST on Paratha?

To know what’s GST on Paratha, one must understand the nature of the item. Also, an advance ruling on this matter was filed. The Gujarat AAR passed an advance ruling in the case of M/s Vadilal Industries Ltd in 2021, and the Gujarat AAAR heard a further appeal in 2022.

The AAR applicant/appellant conducts a business of selling processed food, being different varieties of parathas in packed condition. Parathas include plain, onion, mixed vegetables, mooli, aloo, methi, laccha, and Malabar paratha. The primary ingredient is wheat flour in all varieties. Others include vegetable oil, water, salt, antioxidants, etc. 

The appellant contested GST on Paratha that toasted bread, pizza bread, and rusks attracted 5% GST, whereas GST on Paratha is 18%. AAR in Gujarat held that there are more ingredients in parathas than bread or roti, hence a higher GST rate. Finally, when appealed, the Gujarat AAAR upheld the AAR’s view, and the GST on Paratha was concluded to be 18%.

‘Paratha’ gets classified with an HSN code of 21069099. Parathas are different forms of ‘Khakra’ and ‘plain roti’. Parathas cannot be considered plain chapati or roti since they must be heated before consumption.

The instructions on the package also reiterate that it takes 3-4 minutes to heat a paratha to change its colour, which makes it suitable for human consumption. On the other hand, roti or chapathi falls under the HSN chapter heading 1905 and is ready for consumption when bought. GST on roti or chapathi is 5% (2.5% CGST+2.5% SGST).

The Paratha was initially listed at Entry No.453, belonging to Schedule-III of the CGST Rate Notification No.01/2017, issued on 28th June 2017. GST on Paratha is 18% (9% SGST + 9% CGST). This classification lasted until 14th November 2017.

From 15th November 2017, it was reclassified at Entry No.23 belonging to Schedule-III of the CGST Rate Notification No.01/2017 issued on 28th June 2017 by GST amendment. The GST rate on paratha was retained at 18% (9% SGST + 9% CGST).

FAQs on GST on Paratha

– Is GST applicable on papad?

GST on papad or pappad of whatever shape is exempt or nil rated by CGST Rate notification no. 2/2017 under Entry no. 96.

– Is GST applicable on cooked food?

Yes, GST on cooked food differs according to where it is supplied. Suppose it is an AC or non-AC restaurant not attached to a hotel or without hotel accommodation or is only a takeaway. In that case, the GST on cooked food is 5% without ITC claims for the restaurant under HSN code 9963. If the restaurant is attached to a hotel with a room tariff of Rs.7,500 per day, GST on cooked food is 18%, with ITC claims.