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Clarification regarding GST rates & classification

CBIC wide Circular No. 113/32/2019-GST Dated,11th October, 2019 has Clarified various Representations in respect of Classification and applicable GST rates on the following items:

(i) Classification of leguminous vegetables such as grams when subjected to mild heat treatment

Thus, it is clarified that such leguminous vegetables which are subjected to mere heat treatment for removing moisture, or for softening and puffing or removing the skin, and not subjecting to any other processing or addition of any other ingredients such as salt and oil, would be classified under HS code 0713.

Such goodsif branded and packed in a unit container would attract GST at the rate of 5% [S. No. 25 of notification No. 1/2017- Central Tax (Rate) dated 28.06.2017]. In all other cases such goods would be exempted from GST [S. No. 45 of
notification No. 2/2017- Central Tax (Rate) dated 28.06.2017].

However, if the above dried leguminous vegetable is mixed with other ingredients (such as oil, salt etc) or sold as namkeens then the same would be classified under Sub heading 2106 90 as namkeens, bhujia, chabena and similar edible preparations and attract applicable GST rate.

(ii) Almond Milk

Almond milk is classified under the residual entry in the tariff item 2202 99 90 and attract GST rate of 18%.

(iii) Applicable GST rate on Mechanical Sprayer

It is clarified that the S. No. 195B of the Schedule II to notification No. 1/2017- Central Tax (Rate), dated 28.06.2017 covers “mechanical sprayers” of all types whether or not hand operated (like hand operated sprayer, power operated sprayers, battery operated sprayers, foot sprayer, rocker etc.).

(iv) Taxability of imported stores by the Indian Navy

Indian Naval ship stores are exempted from import duty in terms of section 90(1) of the Customs Act, 1962. Further, as per section 90(2), goods “taken on board a ship of the Indian Navy” shall be construed as exported to any place outside India. Also, section 90(1) and 90(3) of the Customs Act, 1962 provides that imported stores for the use of a ship of the Indian Navy
and stores supplied free by the Government for the use of the crew of a ship of the Indian Navy in accordance with their conditions of service will be exempted from duty.

Accordingly, it is clarified that imported stores for use in navy ships are entitled to exemption from GST.

(v) Taxability of goods imported under lease.

It is hereby clarified that the expression “taken on lease/imported under lease” covers imports under an arrangement so as to supply services covered by item 1(b) or 5(f) of Schedule II of the CGST Act, 2017 to avoid double taxation. The above clarification holds for such transactions in the past.

(vi) Applicable GST rate on parts for the manufacture solar water heater and system

it is clarified that parts including Solar Evacuated Tube falling under chapter 84, 85 and 94 for the manufacture of solar water heater and system will attract 5% GST.

(vii) Applicable GST on parts and accessories suitable for use solely or principally with
a medical device

It is clarified that 12% IGST would be applicable on the parts and accessories suitable for use solely or principally with a medical device falling under heading 9018, 9019, 9021 or 9022 in terms of chapter note 2 (b)

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[Disclaimer: Views expressed herein are based on our short readings of the Circular, I assume no responsibility therefore. In no event, I shall be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.]

 

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