Case Law Details
In re Vadilal Industries Ltd. (GST AAAR Gujarat)
Whether the product viz. ‘Paratha’ i.e. various varieties of Paratha produced by the applicant merit classification under HSN Code 19059090 & Whether the product, namely, ‘Paratha’ i.e. all varieties of Paratha produced by the applicant are chargeable to 5% GST (i.e. 2.5% SGST and 2.5% CGST) under Sl.No. 99A of Schedule-I of Notification No. 01/2017-CT (Rate) and Notification No. 01/2017-IT (Rate) dated 28-6-17?
Parathas supplied by the appellant are different from Plain Roti or Chapatti and cannot be treated as or covered under the category of Plain Roti or Chapatti. Further as held by the GAAR, the parathas supplied by the appellant will not fall under Chapter heading 1905. We find that the appropriate classification of Parathas would be under Chapter heading 2106 as the subject Parathas require to be cooked before the same can be consumed. The Chapter heading 2106 covers food preparations not elsewhere specified or included and Parathas do not fall under any specific chapter head. Further as per Rule 3(c) of Rules of Interpretation, when goods cannot be classifiable under Rule 3(a) or 3(b) then they shall be classified under the heading which occurs last in numerical order among those which merit consideration. Thus, among the headings 1905 and 2106. latter occurs last in the numerical order and hence heading 2016 would be more appropriate and right classification of appellant’s product, even from this consideration.
The appellant submitted that mere heating of their parathas for 3-4 minutes with a little bit of oil would not debar it from falling under Heading 1905 and the GAAR erred in not classifying Paratha under Heading 1905. We refer to cooking instructions mentioned on the packaging of various frozen parathas, as provided by appellant, wherein it is mentioned that “heat on a medium flame for about 3-4 minutes (flipping after every 30 seconds) pressing gently till Paratha is golden brown on both sides”. On going through the above, we observe that the above process of 3-4 minutes of heating amounts to cooking of the Parathas as the color of the Parathas changes and the frozen Parathas become ready for consumption. As compared to Roti or Chappati or items falling under Chapter heading 1905 which are ready to eat and does not require any further processing before consumption, the appellant’s products have to be cooked before the same can be consumed.
The appellant has relied upon the advance ruling by Maharashtra Authority of Advance Ruling in the case of M/s. Signature International Foods India Pvt. Ltd. [2019 (20) GSTL 640], In the said case the authority has held Paratha is covered under Entry No.99A (Khakhra. Plain Chapatti or Roti) and is liable to concessional rate of duty. We find that in the said case the authority has given findings that ” The product before us is examined from this view point. The product is plain like a chapatti and unstuffed like Gobhi paratha. Laccha paratha. To us, this is nothing but a plain chapatti and paratha is a misnomer for this food product supplied by the applicant. As such we do not find any difficulty in classifying the product as plain chapatti covered by entry 99A of Notification No. of 34/2017.” We are of the view that as per Section 103 of the CGST Act, any Advance Ruling is binding on the Applicant who has sought it and on the concerned officer or the jurisdictional officer in respect of the Applicant. We also point out that on the contrary to the above ruling and in consonance with the ruling given by GAAR in the present case, we find that the Authority for Advance Ruling under GST Kerala in the case of M/s. Modem Food Enterprises Pvt. Ltd., while deciding the classification of ‘Classic Malabar Parota’ and ‘Whole Wheat Malabar Parota’ has held that “‘Classic Malabar Parota and Whole Wheat Malabar Parota is classified under Schedule III of GST laws, vide Heading 2106 ‘Food preparations not elsewhere specified or included’ and is taxable @18% GST’.
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