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CBIC issued clarification on the applicability of GST Rate on Certain Goods

The CBIC has issued Circular No. 113/32/2019 – GST dated October 11, 2019, clarifying the applicability of GST Rates on Various Goods in the following items:

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

(ii) Almond Milk

(iii) Applicable GST rate on Mechanical Sprayer

(iv) Taxability of imported stores by the Indian Navy

(v) Taxability of goods imported under lease.

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

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

Clarifications:

  • Classification of leguminous vegetables such as grams when subjected to mild heat treatment: The leguminous vegetables which are subjected to clarifications that mere heat treatment for removing moisture, or for softening and puffing or removing the skin, and not subject to any other processing or addition of any other ingredients such as salt and oil, would be classified under HS code 0713. Such goods if 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 June 28, 2017]. In all other cases, such goods would be exempted from GST [S. No. 45 of notification No. 2/2017- Central Tax (Rate) dated June 28, 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 Subheading 2106 90 as namkeens, bhujia, chabena and similar edible preparations and attract applicable GST rate.
  • Almond Milk: The Almond Milk is made by pulverizing almonds in a blender with water and is then strained. As such almond milk neither constitutes any fruit pulp or fruit juice. Therefore, it is not classifiable under tariff item 2202 99 20. Almond milk is classified under the residual entry in the tariff item 2202 99 90 and attract a GST rate of 18%.
  • Applicable GST rate on Mechanical Sprayer: The S. No. 195B of the Schedule II to notification No. 1/2017- Central Tax (Rate), dated June 28, 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.).
  • The Taxability of imported stores by the Indian Navy: The Indian Navy seeking clarification on the taxability of imported stores for use of a ship of 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. Thus, the imported stores for use in navy ships are entitled to exemption from GST.
  • The Taxability of goods imported under lease: The expression “taken on lease/imported under lease” (in S. No. 557A and 557B respectively of notification No. 50/2017-Customs dated 30.06.2017) 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. Further, wordings of S. No. 557A and 557B of notification No. 50/2017-Customs dated 30.6.2017, have been aligned with Condition No. 102 of the said notification [vide notification No. 34/2019-Customs dated 30.09.2019 w.e. f 01.10.2019] to address the concerns raised.
  • The Applicable GST rate on parts for the manufacture solar water heater and system: The parts including Solar Evacuated Tube falling under chapter 84, 85 and 94 for the manufacture of solar water heater and the system will attract 5% GST.
  • The Applicable GST on parts and accessories suitable for use solely or principally with a medical device: The IGST of 12% 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).

Download Notification: circular-cgst-113

Author: Niranjan Reddy

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