Image Source : PTI Un-fried ‘Fryums’ not ‘Papad’, therefore taxable at 18%
The good previous conventional snack meals ‘papad’ or ‘pappadam’, as it’s recognized in south India, can’t be equated with packaged ‘un-fried fryums and can’t have related tax remedy, the Authority for Advance Rulings (AAR) has dominated.
In its order rejecting a petition searching for to convey irregular-sized packaged snack meals as known as un-fried fryums at par with papad for applicability of GST, the AAR stated that within the matter of the product beneath reference, the place no clear definition has been offered within the statute, the precept of frequent parlance is used.
This means interpretation of statutes for deciphering the thoughts of the lawmaker moderately than every other scientific reasoning.
With this interpretation, papad can’t be equated with every other un-fried fryums and therefore it’s liable to pay 18 per cent GST, as in opposition to nil GST relevant for papad, the AAR has stated.
The AAR ruling brings additional readability in issues of taxation disputes the place no clear definition of a product class is on the market however charges are mounted primarily based on the precept of frequent parlance.
In this explicit case, it’s clear that every one different ‘un-fried packaged meals’ have been thought-about as ‘namkeen’ and never as ‘papad’. Hence, they entice totally different tax charges as in comparison with the standard meals merchandise.
“Classification disputes would be the next big litigation area in GST, and practically bite every industry wherever an exemption or a lower rate of tax is being paid,” stated Rajat Mohan, senior companion at AMRG Associates.
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