MoF issues clarification on GST rates and classification of certain goods


The Ministry of Finance (MoF) has issued a clarification regarding the GST rates and the classification of certain goods. This clarification is issued based on the recommendations of the GST Council. The present clarification was issued on 13th January, 2023.

The circular provides for the following:

  1. Rab -classifiable under Tariff heading 1702

“Rab” means ‘massecuite prepared by concentrating sugarcane juice on open pan furnaces, and
includes Rab Galawat and Rab Salawat, but does not include khandsari molasses or lauta gur.’

2. Applicability of GST on by-products of milling of Dal and Pulses such as Chilka, Khanda, and Churi/Chuni

The GST council in its 48th meeting has recommended to fully exempt the supply of subject goods, irrespective of its end use. This will be in effect from the 1st January, 2023.

Clarification regarding ‘Carbonated Beverages of Fruit Drink’ or ‘Carbonated Beverages with Fruit Juice’

The ‘Carbonated Beverages of Fruit Drink’ or ‘Carbonated Beverages with Fruit Juice’ will have the HS code 2202 99. The said goods attract GST at the rate of 28% and Compensation Cess at the rate of 12%.

Applicability of GST on Snack pellets manufactured through an extrusion process (such as ‘fryums’)

Snack pellets (such as ‘fryums’), which are manufactured through the process of extrusion, are appropriately classifiable under tariff item 1905 90 30, which covers goods with description ‘Extruded or expanded products, savoury or salted’, and thereby attract GST at the rate of 18%.

Applicability of Compensation cess on Sports Utility Vehicles (SUVs)

Compensation Cess at the rate of 22% is applicable on Motor vehicles, falling under heading 8703, which satisfy all four specifications, namely: –
1. these are popularly known as SUVs;

2. the engine capacity exceeds 1,500 cc;

3. the length exceeds 4,000 mm; and

4. the ground clearance is 170 mm and above.

Applicability  of  IGST  rate  on  goods  specified  under  notification  No.  3/2017-Integrated Tax (Rate)

The importer can claim the benefit of the lower rate where goods which are eligible for IGST rate of 12% under and are also eligible for the benefit of lower rate under IGST rate notifications

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