As per the direction of The Authority for Advance Rulings (Karnataka bench) frozen parotta is moved on a higher Goods and Services Tax (GST) slab of 18% as compared to roti which is on a lower tax slab of 5% GST.
Yes, both of them are flat Indian bread which is used as a staple diet for common people. Government officials tried to explain their move by saying that frozen parottas are “consumed by the class which could afford to pay taxes”, government sources said on Saturday.
“It may be noted that frozen parotta is preserved, sealed packed, branded, and is usually sold at higher prices. It is not a staple item and is consumed by the class which could afford to pay taxes. Even items like cheaper biscuits, pastries, cakes, etc., attract GST at the rate of 18%. Frozen food would be more comparable to such item. Frozen foods cannot be comparable to plain roti or plain parotta served in restaurants or taken as a staple food, or eaten by poor on a day-to-day basis (sic),” government sources said.
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There is a debate going online regarding this, in which many people including great industrialists like Anand Mahindra criticized this move and suggested that with a new innovation of something like ‘Parotis’, a new tax challenge will be there.
This ready to cook food industry plays a major role in the economy of our country, which around some industry sources close to Rs.500 Crore industry revenue annually. This move of the Karnataka government will definitely increase its tax revenue by a large percentage.
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