The Kerala High Court has intervened to halt a recent judgment that had ruled on the Goods and Services Tax (GST) rate applicable to Malabar parota, a popular South Indian flatbread, according to a report by the Bar and Bench. The decision, which stated that Malabar parota should attract a GST of 5% rather than 18%, has been temporarily suspended following an appeal by the State government.
The single-judge ruling in the case of State of Kerala v. Modern Food Enterprises Private Limited had sparked controversy by determining that Malabar parota falls under a category attracting a lower GST rate of 5%, under HSN code 1905, akin to certain food preparations. This decision was challenged by the State government, leading to the latest development in the case, the report said.
A division bench comprising Justices A Muhamed Mustaque and S Manu issued the stay order on Tuesday, which suspends the operation of the earlier judgment for a period of two months. This decision came in response to the appeal filed by the State government against the single-judge verdict issued in April this year.
The dispute centers on whether Malabar parota should be classified under the GST rate of 5% or 18%. Modern Food Enterprises Pvt. Ltd., the petitioner in the case, argued that the product should be taxed at the lower rate based on its ingredients and preparation process, which it claims are similar to those of products falling under the 5% category.
However, the government countered that Malabar parota should be taxed at 18% GST, as it differs significantly from the products covered under the lower tax bracket. The Appellate Authority for Advance Ruling had initially ruled in favor of the higher tax rate, prompting Modern Food to seek redress through the Kerala High Court.
Source: CNBC TV18
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