The parotta v/s bread GST classification is just one in the list of many such tax disputes

In a dispute between Nestle (India) and the Commissioner of Central Excise, Kit Kat was classified as a biscuit and not a chocolate, favouring the company's appeal for a lower tax rate burden.

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ID Fresh Foods, a brand selling idli/dosa batter and ready-made parotta, in October last year approached the Authority for Advance Ruling (AAR) in Karnataka to seek clarity on whether the preparation of whole wheat parotta and Malabar parotta should be classified under Chapter 1905, attracting a Goods & Services Tax (GST) of 5 percent.

The Karnataka bench of AAR in its ruling differentiated between khakhra, plain chapati or roti and the parotta, and observed that ready-to-eat parotta needs additional processing by way of heating for consumption, and hence is liable for 18 percent GST.

However, it is not the first case of tax classification disputes. Producers of FMCG products were also involved in tangles with tax authorities on the same issue. There was a tax dispute over whether Marico's Parachute should be classified as hair oil or ordinary coconut oil.

In response to a petition filed by Alisha Foods,  the Madhya Pradesh bench of Authority for Advance Ruling (AAR) in November observed that fryums should be classified as a residual entry for food items not specified elsewhere and to be taxed at a higher 18 percent Goods and Services Tax (GST), instead of the earlier classification of it as papad that attracted 5 percent tax.

Also Read | GST potpourri explained: Why you'll pay more for a parotta and less for the humble bread

Dabur India too got into a tax dispute over the classification of Lal Dant Manjan as a tooth powder or medicinal drug. It was classified as tooth powder.

Marico, in a bid to attract lower levy, wanted its flagship product to be classified as coconut oil. At the time of GST rollout, Kerala in GST Council meetings made a pitch for coconut oil being classified as edible oil.

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In a dispute between Nestle (India) and the Commissioner of Central Excise, Kit Kat was classified as a biscuit and not a chocolate, favouring the company's appeal for a lower tax rate burden.

"…While all chocolate must necessarily contain cocoa, it is not every cocoa product or preparation that is chocolate," the ruling stated.

The chief commissioner of Income Tax (Appeals) for assessment years 2001-02 to 2004-2005 had held that Sachin Tendulkar was not an actor since playing cricket was his principal profession. This was regarding an income tax dispute case that arose in May 2011.

An Income Tax tribunal allowed cricketer Sachin Tendulkar, who was then a part of the Indian national cricket team, to claim deductions from his taxable income arising from earnings from appearances in advertisements.

Tendulkar argued against the Income Tax (Appeals) verdict that the deductions he claimed under he claimed Section 80 RR of I-T Act were on the grounds that he was an ‘actor’ while appearing in advertisements. His argument was upheld by a tribunal in its order, entitling him to deductions on payments received from sports sponsorship and advertisements during the period.

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