Flour millers have requested the government to consider zero GST on consumer packs of atta, maida, sooji (upto 25 kg), that currently levied at 5 per cent while packs above 25 kg do not attract any tax. The request followed the GST Council’s recent decision to bring down the tax rate on roti, paratha to zero from September 22.
Millers argued that in India the maximum consumed rotis are prepared at home. In towns and cities people buy atta (wheat flour) normally in 10 kg or 5 kg pack. In case of maida and sooji they buy in 1 kg or 500 gram pack.
Consumers too deserve to be treated equally, as hotels, food processors who buy atta, maida in bulk and do not pay any GST on the wheat flour and now even their processed product is also free of tax, a miller said.
“Paratha, parotta and other Indian breads by any name called” would attract ‘nil’ GST from 18 per cent now while “khakhra, chapathi or roti” too would have no GST from September 22 as against 5 per cent now, the government had said while accepting the GST Council recommendations.
In a memorandum to Finance Minister Nirmala Sitharaman sent on September 4, the Roller Flour Millers’ Federation of India said that while it extends gratitude for the government’s proactive measures in rationalising GST rates on essential food items, at the same time it requested to extend the existing GST exemption on finished wheat-based products to the household pack sizes (up to 25 kg).
Such a decision would help align policy coherence by making the entire supply chain from raw ingredients to finished goods genuinely tax-free for the common consumer, thereby providing significant relief to millions of families across the country, President of the federation said.
“This disparity, wherein only the finished products (roti, parotta, etc.) made commercially are exempt from GST while the essential ingredients (atta, maida, sooji , etc.) in household pack size (up to 25 kg) of finished products when made at home attract 5 per cent GST, creates an inequitable situation and inadvertently penalises households that prefer or rely on home-cooked meals for economic, health, or cultural reasons.
“Since home-made rotis and related items form the daily staple diet of a large majority of Indian families, this tax impacts their food budget directly, especially in rural and semi-urban areas where bulk household purchases are common for sustenance,” he said.
The Kerala High Court in April had ruled that Malabar Parotta would attract 5 per cent and not 18 per cent GST after Kochi-based Modern Food Enterprises appealed against the Order of Appellate Authority for Advance Ruling (AAAR). The single judge bench of Justice Dinesh Kumar Singh had said that if key inputs (cereals, flour, starch, etc) and preparations are somewhat similar for products, then exclusion of one product from the taxation point of view cannot be justified.
Citing the judgement an industry official said when preparation process is same to make roti, it is not fair to charge differential GST rate on same raw material, that too when bulk packs are sold at much cheaper rates than consumer packs. For instance 1 kg maida in consumer packs sold by companies at ₹60-80/kg through e-commerce platforms in NCR of Delhi, which the flour millers sell in bulk at about ₹1,650/bag of 50 kg (or ₹33/kg).
