REDUCTION
OF RATE OF TAX UNDER GST FOR CERTAIN GOODS
AND
GRANT OF
EXEMPTION UNDER GST WITH EFFECT FROM 15.11.2017
The Goods and Services Tax Act, 2017 came into force
in India with effect from 1.7.2017.
The GST Council in its 23rd meeting held at Guwahati had detailed discussions and made the change of rate of tax for certain goods and also allowed exemption on certain goods.
The GST Council in its 23rd meeting held at Guwahati had detailed discussions and made the change of rate of tax for certain goods and also allowed exemption on certain goods.
As per latest decisions taken by the GST Council
only 50 items will attract GST rate of tax at 28% and the remaining items will
come under reduced rate categories.
Similar changes have also made under other headings.
To view the GST Rate of tax changes with HSN Codes click the link given below:
http://www.cbec.gov.in/resources//htdocs-cbec/gst/Changes-in-GST-IGST-10-11-2017.pdf
To view the GST Rate of tax changes with HSN Codes click the link given below:
http://www.cbec.gov.in/resources//htdocs-cbec/gst/Changes-in-GST-IGST-10-11-2017.pdf
The GST Council meetings decisions were given below
for ready reference.
PRESS RELEASE ON
GST RATE
CHANGES
Recommendations made by the GST Council as per discussions in its 23rd Meeting on
10th November,
2017 held at Guwahati
This information is being uploaded immediately after the discussions in the 23rd GST Council Meeting.
a) In
the
meeting held
today, that is 10th November,
2017,
the
Council has
recommended major relief
in GST rates on certain goods and
services. These recommendations spread across
many
sectors and across
commodities.
b) As per these recommendations, the list of 28% GST rated goods is recommended to be
pruned substantially, from 224 tariff headings [about 18.5%
of total tariff headings at 4-digit] to only 50 tariff headings including 4 headings which have been
partially reduced
to 18% [about 4% of
total tariff headings at
4-digit].
c) Further, the Council has recommended changes in GST rates on a number of
goods, so as to rationalise
the rate structure with a view to minimise classification disputes.
d) The
Council has also recommended issuance of certain clarifications to address
the grievance of trade on issues relating to GST rates and taxability of certain
goods and services.
e) On the services side also, the Council recommended changes in GST rates to provide relief
to aviation &
handicraft sectors
and
restaurants.
2. Major
recommendations of the Council are
summarised below.
(I)
Pruning of list
of
28% rated goods: The Council has recommended reduction in GST
rate
from 28% to 18% on goods falling
in 178 headings at 4-digit level (including 4 tariff
heading that are partially pruned). After these changes, only 50 items will attract GST rate
of 28%.
a) Goods on which the Council has recommended reduction in GST rate from
28% to 18% include:
v Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches,
sockets, fuses, relays, electrical connectors
v Electrical boards, panels, consoles, cabinets
etc for electric control or distribution
v Particle/fibre
boards and ply
wood.
Article of wood,
wooden frame,
paving block
v Furniture, mattress, bedding and
similar furnishing
v Trunk, suitcase, vanity cases, brief cases, travelling bags and other hand
bags, cases
v Detergents, washing and cleaning preparations
v Liquid or cream for washing the
skin
v Shampoos; Hair cream, Hair dyes (natural, herbal or synthetic) and similar
other goods; henna powder or paste, not mixed with any other
ingredient;
v Pre-shave, shaving or after-shave preparations, personal deodorants, bath
preparations, perfumery, cosmetic or toilet
preparations, room deodorisers
v Perfumes and
toilet waters
v Beauty or make-up preparations
v Fans, pumps, compressors
v Lamp and
light
fitting
v Primary cell and
primary batteries
v Sanitary ware and parts
thereof of all kind
v Articles of plastic,
floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic
v Slabs of marbles
and
granite
v Goods of marble and granite
such as tiles
v Ceramic
tiles of all kinds
v Miscellaneous
articles such as
vacuum flasks, lighters,
v Wrist watches,
clocks, watch movement,
watch cases,
straps,
parts
v Article of apparel & clothing accessories of leather, guts, furskin, artificial
fur and other articles such as
saddlery and harness
for any animal
v Articles
of
cutlery,
stoves,
cookers
and similar
non
electric domestic
appliances
v Razor and
razor
blades
v Multi-functional
printers, cartridges
v Office or desk
equipment
v Door,
windows and frames
of aluminium.
v Articles
of plaster such as
board, sheet,
v Articles
of cement or concrete
or stone and artificial stone,
v Articles
of asphalt or slate,
v Articles
of mica
v Ceramic flooring blocks, pipes, conduit, pipe fitting
v Wall paper and
wall covering
v Glass of all kinds and articles thereof such as mirror, safety glass, sheets,
glassware
v Electrical, electronic
weighing machinery
v Fire extinguishers and fire extinguishing charge
v Fork lifts,
lifting and handling equipment,
v Bull dozers, excavators, loaders,
road rollers,
v Earth
moving and levelling machinery,
v Escalators,
v Cooling towers,
pressure vessels,
reactors
v Crankshaft for sewing machine, tailor’s dummies, bearing housings, gears
and gearing; ball or
roller screws; gaskets
v Electrical apparatus for radio and television broadcasting
v Sound recording or reproducing apparatus
v Signalling,
safety or
traffic control
equipment for transports
v Physical
exercise
equipment,
festival and
carnival equipment,
swings,
shooting galleries, roundabouts, gymnastic
and athletic equipment
v All musical instruments
and their parts
v Artificial flowers,
foliage and artificial fruits
v Explosive,
anti-knocking preparation,
fireworks
v Cocoa butter, fat,
oil powder,
v Extract, essence ad concentrates of
coffee, miscellaneous food preparations
v Chocolates, Chewing gum / bubble
gum
v Malt extract and food preparations of flour, groats, meal, starch or malt extract
v Waffles and
wafers coated
with chocolate or containing chocolate
v Rubber
tubes and miscellaneous
articles of rubber
v Goggles,
binoculars, telescope,
v Cinematographic cameras and
projectors, image projector,
v Microscope,
specified laboratory equipment, specified
scientific equipment
such as for meteorology, hydrology, oceanography, geology
v Solvent, thinners,
hydraulic fluids, anti-freezing preparation
b) Goods on which the Council has recommended reduction in GST rate from 28% to 12% are:
v Wet
grinders consisting
of stone as grinder
v Tanks and
other armoured fighting vehicles
(II) Other changes/rationalisation of GST rates on goods:
a) 18% to 12%
i. Condensed milk
ii. Refined sugar and
sugar cubes
iii. Pasta
iv. Curry paste,
mayonnaise and
salad dressings,
mixed condiments
and mixed
seasoning
v. Diabetic food
vi. Medicinal grade oxygen vii. Printing ink
viii.
Hand
bags and
shopping bags of jute
and cotton ix. Hats
(knitted
or crocheted)
x. Parts of specified agricultural, horticultural, forestry, harvesting or threshing
machinery
xi.
Specified
parts of sewing
machine xii. Spectacles
frames
xiii.
Furniture wholly made of
bamboo or cane
b) 18% to 5%
i. Puffed
rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza,
kazuali,
groundnut sweets gatta, kuliya
ii. Flour
of potatoes put up in unit container bearing a brand name iii. Chutney powder
iv. Fly ash
v. Sulphur
recovered in refining of
crude
vi. Fly ash aggregate with
90% or more fly ash content
c) 12% to 5%
i. Desiccated coconut
ii. Narrow woven fabric including cotton newar [with no refund of unutilised
input tax credit]
iii. Idli, dosa
batter
iv. Finished leather, chamois
and composition leather v. Coir
cordage and ropes,
jute twine, coir products
vi. Fishing net and
fishing hooks vii.
Worn
clothing
viii.
Fly ash brick
d) 5% to nil
i. Guar
meal
ii. Hop cone (other than grounded, powdered
or in pellet form)
iii. Certain
dried vegetables such as
sweet
potatoes, maniac
iv. Unworked coconut
shell
v. Fish
frozen or dried
(not put up in unit container
bearing a brand name)
vi. Khandsari sugar
e) Miscellaneous
i. GST rates on aircraft engines from 28%/18% to 5%, aircraft tyres from
28% to 5% and aircraft seats from
28% to 5%.
ii. GST rate
on bangles of lac/shellac from
3% GST rate to Nil.
(III)
Exemption from IGST/GST
in certain
specified cases:
i. Exemption from IGST on imports of lifesaving medicine supplied free of cost by overseas supplier for patients, subject to certification by
DGHS of Centre or State
and certain other conditions
ii. Exemption from IGST on imports of goods (other than motor vehicles) under a lease agreement
if
IGST is paid on the lease amount.
iii. To extend IGST exemption presently applicable to skimmed milk powder or concentrated milk, when supplied to distinct person under section 25(4) for use in production of milk for distribution through dairy cooperatives to where such milk
is distributed through companies
registered
under the Companies Act.
iv. Exemption
from IGST on imports
of specified goods
by a sports person of outstanding eminence,
subject
to specified conditions
v. Exemption
from GST on specified
goods,
such
as scientific
or
technical
instruments, software, prototype supplied
to public funded research institution or
a university or IISc,
or IITs or
NIT.
vi. Coverage of more items, such as temporary import of professional equipment by
accredited press persons visiting India to
cover certain events, broadcasting equipments, sports items, testing equipment, under ATA carnet system. These goods
are
to be re-exported after the specified
use is over.
(IV) Other changes
for
simplification and harmonisation
or clarification of issues
i. To clarify that inter-state movement of goods like rigs, tools, spares and goods on wheel like cranes, not being in the course of furtherance of supply
of such goods, does not constitute a supply. This clarification gives major compliance relief to industry
as
there are frequent inter-state
movement of such kind in the course of providing services to customers
or for the purposes of getting such goods repaired or refurbished or for any self-use.
Service
provided using such goods would in
any case attract
applicable tax.
ii. To prescribe that GST on supply of raw cotton by agriculturist will be liable to be paid
by
the recipient
of such supply under reverse charge.
iii. Supply of e-waste attracts 5% GST rate. Concerned notification to be amended to
make it amply clear that this rate applies only to e-waste discarded as waste by the consumer or bulk
consumer.
(V) Changes
relating to GST rates on certain services
(A) Exemptions /
Changes in GST
Rates / ITC Eligibility Criteria
i. All
stand-alone restaurants
irrespective of air
conditioned
or
otherwise,
will
attract 5% without ITC. Food parcels (or takeaways) will also attract 5% GST without ITC.
ii. Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will attract
GST of 5% without
ITC.
iii. Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per
day
(even for a single room) will attract GST
of 18% with full ITC.
iv. Outdoor
catering will continue to
be at 18% with full ITC.
v. GST on services by way of
admission to "protected monuments" to be exempted.
vi. GST rate on job work services in relation
to manufacture of those handicraft
goods in respect of which the casual taxable person has been exempted from
obtaining registration,
to be reduced to 5% with full input tax credit.
(B) Rationalization of
certain exemption
entries
i. The existing exemption entries with respect to services provided by Fair Price Shops to the Central Government, State Governments or Union Territories by
way of sale of food grains, kerosene, sugar, edible oil, etc. under Public
Distribution System (PDS)
against consideration in the form of commission or margin, is being rationalized so as to remove ambiguity regarding list of items
and the category of
recipients
to whom the exemption
is available.
ii. In order to maintain consistency, entry at item (vi) of Sr. No.3 of notification No.
11/2017-CT(R) will be aligned with the entries at items (ii), (iii), (iv) and (v)
of SI.No.3. [The word “services” in entry (vi) will be replaced with "Composite supply of Works contract as defined in clause
119 of Section 2 of CGST Act,
2017"].
iii. In order
to
obviate
dispute
and litigation,
it
is
proposed
that
irrespective of whether permanent transfer of Intellectual Property is a supply
of goods or service.-
(i) permanent transfer of Intellectual Property other than Information
Technology software attracts GST
at the rate of
12%; and
(ii) permanent
transfer of Intellectual Property in respect
of Information
Technology software attracts GST
at the rate of
18%.
(C) Clarifications
i. It is being
clarified
that
credit
of
GST
paid on aircraft
engines, parts
&
accessories will be available for discharging GST on inter–state supply of such aircraft engines, parts & accessories by way of inter-state stock transfers between
distinct persons as specified in section 25 of
the CGST Act.
ii. A Circular will be issued clarifying that processed products such as tea (i.e. black
tea, white tea etc.),
processed coffee beans or powder,
pulses (de-husked or split),
jaggery, processed spices, processed dry fruits & cashew nuts etc. fall outside the definition of agricultural produce given in notification No. 11/2017-CT(R) and
12/2017-CT(R)
and
therefore the exemption from GST is not available to their
loading, packing,
warehousing etc.
iii. A suitable clarification will be issued that (i) services provided to the Central
Government, State Government, Union territory under any insurance scheme for which total
premium is paid
by the Central Government, State Government, Union territory are exempt
from GST under
Sl. No. 40 of notification
No.
12/2017-Central Tax (Rate);
(ii) services provided by
State Government by way
of general insurance (managed by
government) to employees of the State government/ Police personnel, employees of Electricity Department or students are exempt vide entry
6 of
notification No. 12/2017-CT(R) which exempts
Services by Central
Government, State Government, Union territory or local authority to
individuals.
3. It is proposed to issue notifications [giving effect to these recommendations of the
Council] on 14th/15th November,
2017, to be effective from 00hrs on 15th of
November, 2017.
