Frozen paratha is not roti, will be taxed 18% GST: Sources

New Delhi: The restaurants are up in arms with the Authority for Advance Ruling (AAR) over levying of 18% GST on paratha or parota. The AAR ruled that 18% GST will be levied on wheat packaged paratha and malabar paratha which are frozen packs.

The reason is that since the paratha is frozen it is preserved, it gives a shelf life of 3-7 days, it is sold in branded packs at a higher price and hence 18% tax will have to be paid on the product.

Meanwhile, government sources told Zee News that the matter is not up for debate and one must pay 18% GST on frozen packed parathas.

According a highly placed source, Roti and paratha, which are served in restaurants for dinner or take-away is currently being charged at 5% GST because it is freshly cooked and not frozen, preserved, and not sold in expensive packs. 

Just like there is no GST on milk but if it is sold in a tetra pack 5% GST is charged, and 12% GST if it sold in condensed form. This is how multinational FMCG companies end up making a lot of profit, the source said.

Moreover, even biscuit packets, pastry, and cake which is made of wheat, also attracts 18% GST. So, processed and packaged food items are subject to higher tax due to the  category they are placed under.

The AAR's is not talking about roti or paratha, but rather frozen, packed parathas, which is sold at higher price. It cannot be compared to roti which falls under 5% GST category and so it is acceptable to levy 18% GST on the item.

As per sources, clearly the government will keep the frozen paratha within 18% tax bracket.