CBIC CLARIFICATIONS ON LEVY OF GST ON GOODS

[Dr. Sanjiv Agarwal]

CBIC has issued clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 55th meeting held on 21st December, 2024, at Jaisalmer.

CBIC has clarified the following issues:

• Clarification on classification and GST rate on pepper of genus Piper
• Clarification regarding raisins supplied by an agriculturist
• Clarification on GST rate on ready to eat popcorn
• Clarification on classification of Fly ash based Autoclaved Aerated Concrete Blocks
• Effective date of amended entry regarding ground clearance for compensation cess

Clarification regarding classification and GST rate on pepper of genus piper

• CBIC has now issued clarification on classification and applicable GST rate on supply of pepper of the genus Piper and whether supply of dried pepper by an agriculturist is exempt from levy of GST.
• Accordingly, it has been clarified that pepper of genus Piper, whether green (fresh), white or black, is covered under HSN Code 0904 and attracts 5% GST vide S.No. 38 of Schedule I of Notification No. 1/2017-Central Tax (Rate) dated the 28.06.2017
• On applicability of GST on supply of dried pepper by an agriculturist from their plantations, Section 23 (1) (b) of the CGST Act, 2017 provides that an agriculturist, as defined in Section 2(7) of the CGST Act, 2017 to the extent of supply of produce out of cultivation of land is not liable to take registration. Therefore, an agriculturist supplying dried pepper is not liable to be registered under Section 23(1) of the CGST Act, 2017.

Clarification regarding rate of tax on raisins supplied by an agriculturist

• CBIC has now issued clarification on the taxability of supply of raisins by agriculturists.
• It has been clarified that an agriculturist supplying raisins is not liable to be registered under Section 23(1) of the CGST Act, 2017.
• A raisins supplied by agriculturist is exempt from GST.

Clarification on GST rate on ready to eat popcorn

• CBIC has now issued clarification in relation to appropriate classification and applicable GST rate on ready to eat popcorn.
• It has been clarified that ready to eat popcorn which is mixed with salt and spices are classifiable under HSN Code 2106 90 99. Further, such ready to eat popcorn mixed with salt and spices classifiable under HSN Code 2106 90 99 attracts 5% GST if other than pre-packaged and labelled vide S. No. 101A of Schedule I of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and 12% GST if sold as packaged and labelled vide S. No. 46 of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as it has the essential character of ‘namkeens’.
• When the popcorn is mixed with sugar thereby changing its character to sugar confectionary (e.g. caramel popcorn), it would be classifiable under HSN Code 1704 90 90 attracting 18% GST vide S. No. 12 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017
• The issue relating to GST on popcorn mixed with salt and spices for past period up to 14.2.2025 shall stand regularized on 'as is where is' basis.

Clarification on Fly ash based Autoclaved Aerated Concrete Blocks

• CBIC has now issued clarification on classification and applicable GST rate on autoclaved aerated concrete (AAC) blocks containing at least 50% fly ash content as raw material.
• Fly ash bricks, fly ash aggregates and fly ash blocks classifiable under HSN Code 6815 attracts 12% GST vide S. No. 176B of Schedule II of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.
• Articles of cement, of concrete or of artificial stone, whether or not reinforced classifiable under HSN Code 6810 attract 18% GST vide S.No. 181 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.
• Further, it has been clarified that autoclaved aerated concrete (AAC) blocks containing more than 50% fly ash content will fall under HSN Code 6815 and attract 12% GST.

Clarification on effective date of amended entry regarding ground clearance of vehicles for compensation cess

• CBIC  has clarified the effective date of amended entry regarding ground clearance for Compensation Cess to bring uniformity regarding the effective date of amended entry 52B in Notification No. 1/2017-Compensation Cess (Rate) dated 28.06.2017.
• Prior to the 50^th GST Council meeting, vide entry at S.No. 52B in the Notification No. 01/2017- Compensation Cess (Rate) dated 28.06.2017, motor vehicles of engine capacity exceeding 1500 cc, popularly known as SUVs, including utility vehicles attracted 22% Compensation Cess.
• Following the 50^th GST Council meeting, vide Notification No. 03/2023- Compensation Cess (Rate) dated 26.07.2023, the entry 52B was substituted to provide that the cess will be applicable to all motor vehicles known as utility vehicles by whatever name called, with engine capacity exceeding 1500cc, length exceeding 4000mm and ground clearance of 170mm and above. Further, a new explanation was added that ground clearance means ground clearance in unladen conditions.
• It is now clarified that the amendment carried out vide Notification No. 03/2023- Compensation Cess (Rate) dated 26.07.2023 will apply on or after 26.07.2023.