The Karnataka government has ruled differentiating paratha or parota from roti, which are essentially two types of Indian breads, and has clarified that paratha must be taxed at more than triple the GST tax rate on roti.
The Karnataka government has ruled differentiating paratha or parota from roti, which are essentially two types of Indian breads, and has clarified that paratha must be taxed at more than triple the GST tax rate on roti. The Authority for Advance Rulings (Karnataka bench) has said that parathas must attract 18% GST, while roti is taxed at the concessional GST tax slab rate of 5%. Since the order has come out, “18% GST” has been trending on Twitter, with several industrialists and critics taking a dig at it. industrialist Anand Mahindra weighed in on the discourse, with a potential innovative solution that might throw a new tax challenge.
“With all the other challenges the country is facing, it makes you wonder if we should be worrying about an existential crisis for the ‘Parota.’ In any case, given Indian jugaad skills, I’m pretty sure there will be a new breed of ‘Parotis’ that will challenge any categorisation,” Mahindra & Mahindra group chairman Anand Mahindra tweeted.
The Karnataka bench’s order comes after a ready-to-cook meal maker sought the authority for more clarification on GST rates for variants of parotas. In its order, AAR said that rotis are already prepared or completely cooked meals while parotas need to be heated before consumption.
India is not the only country which has made different tax slabs for an item based on the temperature at which these food items are served. “This is actually quite a common dilemma When I lived in the UK (1990a) and later (early 2000s) in NYC, a sandwich heated up attracted VAT but, sold cold, did not. Not sure about the present position,” economist Rathin Roy tweeted.
Others also weighed in their opinion. “Around the world, one of the defining features of a GST is simplicity. Only Indian babus and netas could come up with this dog’s breakfast of endless and illogical complexity,” policy commentator and AEI fellow Sadanand Dhume tweeted. Some also worried about how other food items will fare, albeit sarcastically. “Ever since I posted this, it’s troubling me to know where Puri will be in all this. Bhaturas I can understand as they are fatter cousins but a Puri should get some benefit. Phulka maybe a refund,” lawyer Safir Anand wrote in a tweet. Nitin Pai, director of Takshashila Institution, also commented ‘our tax authorities work in mysterious ways’