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Issues: (i) Whether Classic Malabar Parota and Whole Wheat Malabar Parota are classifiable as bread under HSN 1905 and eligible for exemption under Notification No. 2/2017-Central Tax and SRO No. 361/2017. (ii) Whether the products fall under Heading 2106 as food preparations not elsewhere specified or included and are taxable at 18% GST.
Issue (i): Whether Classic Malabar Parota and Whole Wheat Malabar Parota are classifiable as bread under HSN 1905 and eligible for exemption under Notification No. 2/2017-Central Tax and SRO No. 361/2017.
Analysis: The products are prepared as layered parotta and differ materially from bread in preparation, texture, taste, and common market understanding. The exemption entry for bread is specific and eo nomine, and the commercial parlance test does not permit inclusion of parotta within that entry merely because both are flour-based food items.
Conclusion: The products are not classifiable as bread under HSN 1905 and are not eligible for exemption as bread branded or otherwise.
Issue (ii): Whether the products fall under Heading 2106 as food preparations not elsewhere specified or included and are taxable at 18% GST.
Analysis: Heading 2106 is the residuary entry for food preparations not specifically covered elsewhere. Since parotta is not covered by the bread exemption and does not fit within the specific exempted commodity, it falls within the scope of Heading 2106 and attracts the applicable GST rate.
Conclusion: The products are classifiable under Heading 2106 and are taxable at 18% GST.
Final Conclusion: The advance ruling answers both questions against the applicant and confirms taxability under the residuary food preparations entry rather than the bread exemption entry.
Ratio Decidendi: An exemption entry for bread must be construed strictly according to its ordinary commercial meaning, and a layered parotta product not ordinarily understood as bread falls under the residuary entry for food preparations not elsewhere specified or included.
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