Classic Malabar Parota and Whole Wheat Malabar Parota to Be Classified Under HSN 1905 & Taxable at 5% | Kerala HC

Case Details: Modern Food Enterprises (P.) Ltd. v. Union of India - [2024] 161 taxmann.com 538 (Kerala)

Judiciary and Counsel Details

• • Dinesh Kumar Singh, J.
  • M. Gopikrishnan Nambiar, K. John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C. Abraham, Raja Kannan, R. Chethan Krishna, & S. Parvathi, Advs. for the Petitioner.
  • P.G. Jayashankar, & Muhammed Rafiq, SPL., GP (TAXES), for the Respondent.

Facts of the Case

The petitioner was engaged in manufacture and supply of foods products and filed an application for advance ruling to determine the classification and rate of tax on its products. It was contended that its products would qualify as ‘bread’ and should be taxable at 5% under GST. However, the AAR held that the products would be taxable at 18% and it filed appeal before the Appellate Authority for Advance Ruling (AAAR). The AAAR also held that the products would be taxable at 18%. It filed writ petition against the order.

High Court Held

The Honorable High Court noted that the products are made from the fine flour (Maida) or whole wheat flour (Atta) and thin round sheets of dough are semi-cooked on hot place (Tawa/Skillet) using oil. These are packed and can be consumed after heating them.

The Court also noted that these products are akin/similar to products mentioned in HSN code 1905 of Chapter 19 with heading Preparations of cereals, flour, starch or milk; pastrycooks’ products as ingredients used and process applied in their preparations are somewhat similar to products mentioned in Chapter heading HSN Code 1905. Therefore, it was held that the said products manufactured and supplied by petitioner would be liable to be taxed at 5% as per SI. No. 99A of Notification No. 1/2017-Central Tax (Rate).