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

The 37^thGST 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.

6. GST rates reduction, –
7. 18% to 12% on parts of Slide Fasteners
8. 18% to 5% on Marine Fuel 0.5% (FO)
9. 12% to 5% on Wet Grinders(consisting stone as a grinder)
10. 5% to Nil on:-
11. Dried tamarind
12. Plates and cups made up of leaves/ flowers/bark
13. 3% to 0.25% on cut and polished semi- precious stones
14. Applicable rate to 5% on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP)

 

7. 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.

 

 

2. 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

 

3. 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,

2. 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.

4. 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%)

 

5. 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.

 

2. 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.

 

6. 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%)

 

7. 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.

 

8. Clarifications as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes: 
   1. 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.

2. All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST.
3. 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.

4. 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%.
5. Almond milk is classifiable under HS code 22029990 and attracts GST rate of 18%.
6. Imported stores for Navy would be entitled to exemption from IGST

The rate changes shall be made effective with effect from 1^st 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 – 398

As per Notification No 66 – Central Tax , GST is not required to be levied on receipt of advance from the customers in case of supply of goods. This notification suppresses the  Notification No. 40/2017-Central Tax  which exempted for levy of GST of advance receipts from customers with a turnover less than Rs 150 Lacs.

GST Tip – 366

As per Notification No. 48/2017-Central Tax  deemed exports concept is introduced in GST and the following are classified as deemed exports

• Supply of goods by a registered person against Advance Authorisation
• Supply of capital goods by a registered person against Export Promotion Capital Goods Authorisation
• Supply of gold by a bank or Public Sector Undertaking specified in the notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended) against Advance Authorisation

GST Tip – 324

Exempted Supplies under GST means supplies which attract Nil or Zero rate under GST for the supply of goods or services or both. It also includes non-taxable supplies under GST. Refer to Notification No.2/2017-Central Tax (Rate) for the list of exempted goods.

GST Tip – 286

Notification No. 14/2017-Central Tax (Rate), activities or transactions undertaken by the Central Government or State Government or any local authority in which they are engaged as public authority, shall be treated neither as a supply of goods nor a supply of service, namely:- “Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution.”

GST Tip – 159

Every tax invoice issued by the taxpayer under GST should have HSN (Harmonized System Nomenclature) Code in the case of supply of goods and in the case of supply of services SAC (Services Accounting Code)

GST Tip – 69

Tax Deducted at source is applicable under GST also. It is different from TDS under Income Tax Act. It is applicable on the supply of goods and services as notified by the Government through GST council. Whenever payment is being made to the supplier of goods or services, GST TDS will be recovered / deducted from the payment and then only balance amount is paid.

GST Tip – 66

Composite Supply as per MGL is, is a supply made by a taxable person having more than on supply of goods or services or in any combination. Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is the principal supply.

GST Tip – 65

In a Mixed Supply where the supply of goods or services involves more than one goods or services, the tax rate applicable will be the highest tax rate of the goods / services n the mixed supply.

GST Tip – 64

In the revised MGL a new concept called Mixed Supply is introduced. Mixed supply means a supply of more than one good bundled together and supplied. For example combo pack of Soap, detergent, hand wash, toilet cleaner, floor cleaner and room freshener. This combo pack is a mixed supply.