Kerala High Court Stays Single-Bench Order Which Held 'Malabar Parota' To Be Akin To 'Bread', Eligible To 5% GST

The bench comprising Justice A.Muhamed Mustaque and Justice S. Manu ordered thus:

“There shall be a stay of operation of the impugned judgment for a period of two months.”

The Court issued a stay on the writ appeal filed by the State Government against the order of the single bench that held that Malabar 'Parota' and Whole Wheat Malabar Parota are exigible at the rate of 5% GST and not 18% as held by the Advance Ruling Authority and Advance Ruling Appellate Authority. Disposing the writ petition, the Court held that Malabar 'Parota' and Whole Wheat Malabar Parota were liable to be taxed under the GST Acts and rules made under GST at the rate of 5% on their supply.

The writ petition was filed by Modern Food Enterprises Private Limited which manufactures and supplies food products such as Classic Malabar Parota and Whole Wheat Malabar Parota. The writ petition was filed seeking classification of its products and rate of GST on the understanding that the petitioner's products qualify as 'bread'.

The appellant was aggrieved by the order of the Kerala Authority for Advance Ruling and Appellate Authority for Advance Ruling which stated that bread cannot be equated with parotas or classified as 'bread'. This was because parotta was neither a bakery product nor ready for human consumption as it needed to be heated or further processed for human consumption.

The Appellate Authority for Advance Ruling had thus held that the parotta cannot be classified as bread under Entry 1905 since the products covered under it were generally completely prepared and cooked and did not require any further processing for consumption. Aggrieved by this, the writ petition was filed.

Case Title: State of Kerala v Modern Food Enterprises Private Limited

Case Number: WA NO. 805 OF 2024

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