Written by Archana Kumari
Assistant Professor, Mody University, Rajasthan
Disclaimer: Please note that the views expressed below represent the opinions of the article's author. The following does not necessarily represent the views of Law & Order.
India is a land of different religions and cultures. We Indians have a great love for food and especially for street food. Chapati, phulka, roti – no meal in India is complete without this quintessential flatbread. When most of the Indians visit a restaurant the most common thing to order by almost everyone is either roti or paratha. It is as much an Indian cuisine table as essential as rice. But this common thing is going to change now, not because of any restriction imposed on either of them but because of the bill you pay would be different due to different GST rates on both items.
What is the difference between roti and paratha? A recent 'goods and service' tax ruling sparked off the debate, with the Authority for Advance rulings (AAR) Karnataka bench suggesting that parathas would be subject to a higher GST rate of 18% as compared to roti, on which 5% GST is charged. The AAR, Karnataka bench made an order differentiating that rotis and “parathas” are not “one”, and hence, the differentiation.
AAR has even not appreciated that the term ‘roti’ is generic and can include different types of Indian bread. Therefore, all types of Indian bread cannot be categorized as Rotis.  The Karnataka bench of Authority for Advance Rulings said that ready-to-eat parathas need to be heated before consumption, and thus they would be subjected to higher tax.
The petitioner, ID Fresh Food (India) Pvt. Ltd., which was engaged in preparation and supply of a wide range of ready-to-cook meals and fresh foods, had approached AAR and contended that the product whole wheat paratha or Malabar paratha is available in the ambient and frozen form and thus must be classified under chapter heading 1905, (entry 99A). Therefore, the applicant contended on the basis of their much-debated arguments to include ‘parathas’ under chapter 1905 only, attracting GST at the rate of 5%.
Chapter Heading 1905 
After the petitioner contended that their product must be classified under Tariff Heading 1905, it is essential to know about it. The said heading comprises of products with the following description:
“Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa, communion wafers, empty cachets for pharmaceutical use, sealing wafers, rice paper, and similar products.”
Ruling of AAR
Karnataka AAR with reference to the notification No. 1/2017 – Central Tax (Rate) dated 28.09.2017, especially to explanation (iii) and (iv) amended with notification 34/2017, held that the products covered under heading 1905 are already prepared or completely cooked products and no further process is required to be done on them for consumption and hence they are ready to use food preparations. In the instant case, the impugned products are not ready for consumption, but they need to be heated before consumption. Therefore, the said product cannot be classified under heading 1905 as per chapter 21 (Miscellaneous Edible preparations). It further noticed that the impugned product does not have any specific entry in the customs Tariff Act, 1985. Now, this item will be in classification 2160 90 and thus 18% GST will be applicable now.
Authority of Advance Rulings
Advance Rulings is recognized as a binding statement from the revenue authorities upon the voluntary request of a person, concerning the treatment and consequences of one or series of contemplated future actions or transactions. In India, the Advance Rulings was introduced by the Finance Act, 1993. Chapter XIX-B (section 245N- 245V) of the Income Tax Act, came into force from 01-06-1993. Whenever a taxpayer has doubts regarding tax liability in respect of proposed transactions, he can seek advance rulings from the authority. Advance rulings help in settling disputes in advance. It also brings certainty in determining the tax liability as the ruling given by the authority for advance ruling is binding on the applicant.
After the ruling of Karnataka AAR, a much-heated debate and word’s war started on twitter and other social media platforms. People came up with memes and posts where they questioned the idea of bureaucrats, how they came up with this distinction. The distinction is made on the question that parathas need to be cooked again and so it will lie to a higher GST.
The serious question here is: the ruling held parathas need to be cooked multiple times, and thus should have a higher GST rate. However, when one goes to a high-traffic restaurant where both rotis and parathas are cooked at the same time, the question of a second round of cooking/heating the paratha does not arise. Thus, in light of this, the ruling can be said to be arbitrary and without merits.
The logic behind the decision of AAR is not on the basis of tax slabs but mainly on the basis of the need for further cooking, which is not a relevant point in GST laws.
 Indian Express, Roti vs paratha: What is the difference? June 12, 2020 https://indianexpress.com/article/lifestyle/food-wine/roti-vs-parotta-paratha-difference-6455619/lite/  Ibid.  The products covered under the heading 1905 are already prepared or completely cooked products and no further process is required. https://www.barandbench.com/news/litigation/parotas-are-not-rotis-karnataka-gst-authority-5-gst-not-applicable  Under chapter 19 in the 2017 GST notifications.  Livelaw, Parotas' Are Not Ready To Eat Food Items Unlike 'Roti': AAR Karnataka Orders Levy Of 18% GST On Parotas, 12 June 2020 https://www.livelaw.in/news-updates/parotas-are-not-ready-to-eat-food-items-unlike-roti-aar-karnataka-orders-levy-of-18-gst-on-parotas-read-order-158245  Taxguru, Concept of Advance Ruling under Income Tax Act’ 1961, 4th January 2020 https://taxguru.in/income-tax/concept-of-advance-ruling-under-income-tax-act-1961.html/ BIBLIOGRAPHY