GST Rate on Goods as Recommended by The GST Council in Its 37th Meeting

The 37thGST Council met in Goa today under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman  . The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Chief Minister of Goa Shri Pramod Sawant,  Finance Ministers of States & UTs and seniors officers of the Ministry of Finance .

The council   took the following decisions in respect to rates relating to goods.

  1. GST rates reduction, –
  2. 18% to 12% on parts of Slide Fasteners
  3. 18% to 5% on Marine Fuel 0.5% (FO)
  4. 12% to 5% on Wet Grinders(consisting stone as a grinder)
  5. 5% to Nil on:-
  6. Dried tamarind
  7. Plates and cups made up of leaves/ flowers/bark
  8. 3% to 0.25% on cut and polished semi- precious stones
  9. Applicable rate to 5% on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP)

 

  1. Exemptions from GST/IGST on:-

 

  1. imports of specified defence goods not being manufactured indigenously (upto 2024)
  2. supply of goods and services to FIFA and other specified persons for organizing the Under-17 Women’s Football World Cup in India.
  3.  supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India.

 

 

  1. GST rates have been recommended to be increased from, –
  1. 5% to 12% on goods, falling under chapter 86 of tariff like railway wagons, coaches, rolling stock (without refund of accumulated ITC). This is to address the concern of ITC accumulation with suppliers of these goods.
  2. 18% to 28% +12% compensation cess on caffeinated Beverages

 

  1. Measures for Export Promotion
  1. Exemption from GST/IGST:-
  1. at the time of import on Silver/Platinum by specified nominated agencies
  2. supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery,
  1. Inclusion of Diamond India Limited (DIL) in the list of nominated agencies eligible for IGST exemption on imports of Gold/ Silver/Platinum so as to supply at Nil GST to Jewellery exporters.
  1. A uniform GST rate of 12% on Polypropylene/Polyethylene Woven and Non- Woven Bags and sacks, whether or not laminated, of a kind used for packing of goods (from present rates of 5%/12%/18%)

 

  1. GST concession in certain cases for specific period: –
  1. Exemption to Fishmeal for the period 01.07.17 to 30.09.19. There were doubts as regards taxability offishmeal in view of the interpretational issues. However, any tax collected for this period shall be required to be deposited.

 

  1. 12% GST duringthe period 1.07.2017 to 31.12.2018, on pulley, wheels and other parts (falling under Heading 8483) and used as parts of agricultural machinery.

 

  1. Passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petroland length not exceeding 4000mm designed for carrying upto 9 persons attract compensation cess of 1% for petrol and 3% for diesel vehicle. Council recommended same compensation cess rate for vehicles having these specifications (length and engine capacity) but designed for carrying more than 10 persons but upto 13 persons. (Presently these vehicles attract compensation cess at the rate of 15%)

 

  1. Other miscellaneous Changes:
  • Aerated drink manufacturers shall be excluded from compositionscheme.
  • Option to pay GST at the rate of 18% on transaction value at the time of disposal of specified goods for petroleum operations (on which concessional GST rate of 5% was paid at the time of original supply) provided that the goods are certified by Director General Hydrocarbon(DGH) as non-serviceable.
  • Restriction on refund of compensation cess on tobacco products (in case of inverted duty structure)
  • Prescribing modalities for allowing concessions on spare parts imported temporarily by foreign airlines for repair of their aircraft, while in India in transit in terms of the Chicago Convention on Civil Aviation.
  • Certain other changes of technical nature for the sake of clarity in application of notification.

 

  1. Clarifications as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes: 
      1. Mere heating ofleguminous vegetables (gram/lentil) for removing moisture, or to soften and puff it or removing the skin, and not subjecting to any other processing or addition of any other ingredients (salt, oil etc.) would be classified under HS code 0713.
  1. All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST.
  2. Parts like Solar Evacuation tubes for solar power based devices like solar water heater, solar steam, generation systems, would be eligible to 5% GST rate.
  1. Exclusive parts and accessories suitable for use solely or principally with a medical device (falling under headings 9018, 9019, 9021 or 9022) would fall in respective headings and attract GST at the concessional rate of 12%.
  2. Almond milk is classifiable under HS code 22029990 and attracts GST rate of 18%.
  3. Imported stores for Navy would be entitled to exemption from IGST

The rate changes shall be made effective with effect from 1st October, 2019.

 

[This note presents the decision of the GST Council in simple language for ease of understanding, which would be given effect to through Gazette notifications/circulars, which shall have force of law.]

 

RM/KMN

(Release ID: 1585717)

GST Tip – 296

Section 6.1 of GSTR – 3B, details of payment for GST has to be shown. Amount of Tax Payable, Amount of Tax paid under GST utilizing the ITC and balance amount in cash has to be shown along with interest and late if any payable for CGST, SGST, UTGST, IGST and Cess.

GST Tip – 217

As per the Determination of Value Supply, Open Market Value has to be considered for some transactions and OMV is “open market value” of a supply of goods or services or both means the full value in money, excluding the integrated tax, central tax, State tax, Union territory tax and the cess payable by a person in a transaction, where the supplier and the recipient of the supply are not related and price is the sole consideration, to obtain such supply at the same time when the supply being valued is made.

GST Tip 183

The tax rate for Cess under GST as part of the Goods and Services Tax (Compensation to States) Act, 2017, starts from 15% to 190% in case of sin goods on ad valorem basis and in the case of goods, it is on per ton basis like coal, peat etc at the rate of Rs 400 per ton.

GST Tip 182

Input tax credit for cess being levied under Goods and Services Tax (Compensation to States) Act, 2017,  is eligible only for the making the output tax liability of the Cess under the same act and not for payment of any other taxes output liability under GST.

GST Tip – 181

Under the Goods and Services Tax (Compensation to States) Act, 2017, Cess will be levied on all interstate and intra-state transactions on the supply of goods and service notified by the GST council from time to time. Cess is not applicable to be paid by persons who have opted for registration under composition scheme.