GST RATES AND TAXABILITY OF GOODS

[Dr. Sanjiv Agarwal]

CBIC has issued Circular No. 179 dated 03.08.2022 clarifying on GST applicability issues in relation to certain goods, based on GST Council 47^th meeting decisions.

CBIC clarification on Taxability of Goods

CBIC (TRU) has clarified on the GST rates and classification of goods based on GST Council’s 47^th meeting decisions held on 28-29 June, 2022 as follows:

Electric vehicles whether or not fitted with a battery pack, attract GST rate of 5%:

• The HSN explanatory notes for Chapter 87 have clearly stated that Motor Chassis fitted with cabs i.e. the chassis fitted with cabin body falls under 87.02 to 87.04 and not in heading 87.06.
• Electrically operated vehicle is to be classified under HSN 8703 even if the battery is not fitted to such vehicle at the time of supply and thereby attract GST at the rate of 5% in terms of entry 242A of Schedule I of notification No. 1/2017-Central Tax (Rate).

Stones otherwise covered in S. No. 123 of Schedule-I (such as Napa stones), which are not mirror polished, are eligible for concessional rate under said entry:

• Napa Stone is a variety of dimensional limestone, which is a brittle stone and cannot be subject to extensive mirror polishing.
• Being brittle in nature, stones like Napa Stone, even though ready for use, are not subject to extensive polishing. Therefore, such minor polished stones do not qualify as mirror polished stones.
• S. No. 123 in schedule-I to the Notification No. 1/2017- Central Tax (rate) dated 28.06.2017 covers minor polished stones.

Mangoes under CTH 0804 including mango pulp, but other than fresh mangoes and sliced, dried mangoes, attract GST at 12% rate:

• Mangoes, fresh falling under heading 0804 are exempt; Mangoes, sliced and dried, falling under 0804 are chargeable to a concessional rate of 5%; while all other forms of dried mango, including Mango pulp, attract GST at the rate of 12%. To bring absolute clarity, the relevant entry at S. No. 16 of Schedule-II of Notification No. 1/2017-Central Tax (Rate), dated 28th June, 2017, has been amended vide notification No. 6/2022-Central Tax (Rate), dated the 13th July, 2022.
• Fresh mangoes, falling under heading 0804, continue to remain exempt from GST [S.No. 51 of Notification No. 2/2017-Central Tax (Rate), dated the 28th June, 2017].

Treated sewage water attracts Nil rate of GST:

• In general, Water, falling under heading 2201, with certain specified exclusions, is exempt from GST vide entry at S. No. 99 of Notification No. 2/2017-Central Tax (Rate), dated the 28th June, 2017.
• Supply of treated sewage water, falling under heading 2201, is exempt under GST. Further, to clarify the issue, the word 'purified' is being omitted from the above-mentioned entry vide Notification No. 7/2022-Central Tax (Rate), Dated The 13th July, 2022.

Nicotine Polacrilex Gum attracts GST rate @ 18%:

• Nicotine Polacrilex gum which is commonly applied orally and is intended to assist tobacco use cessation is appropriately classifiable under tariff item 2404 91 00 with applicable GST rate of 18% [S.No. 26B in Schedule III of Notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017].

Fly ash bricks and aggregate - condition of 90% fly ash content applied only to fly ash aggregate, and not fly ash bricks:

• As per entry at S. No. 176B of the Schedule II the items of description “Fly ash bricks or fly ash aggregate with 90 per cent. or more fly ash content; Fly ash blocks” attracts a GST rate of 12%.
• The condition of 90 percent or more fly ash content applied only to Fly Ash Aggregates and not to fly ash bricks and fly ash blocks however, with effect from 18th July, 2022 the condition is omitted from the description.

Applicability of GST on by-products of milling of Dal/ Pulses such as Chilka, Khanda and Churi:

• The by-products of milling of pulses/ dal such as Chilka, Khanda and Churi are appropriately classifiable under heading 2302 that consists of goods having description as bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants.
• Goods which inter alia is used as cattle feed ingredient are appropriately classifiable under heading 2302 and attract GST at the rate of 5% vide S. No. 103A of Schedule-I of Notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017.
• For the past period, matter would be regularized.

The readers may refer to the Circular for detailed reading.