The Government of West Bengal, Directorate of Commercial Taxes, has issued Trade Circular No. 28/2024 dated 16th December 2024, offering important clarifications on the GST rates and classifications for various goods.
These clarifications are based on the recommendations made during the 54th GST Council meeting, held on 9th September 2024, and will help ensure consistency in the application of GST across the state. Below is a summary of the key points from the circular that businesses should be aware of:
1. GST Rate on Extruded/Expanded Savoury Food Products
One of the key clarifications is related to the GST rates on extruded or expanded savoury food products, such as snack pellets. Businesses had raised concerns about whether savoury or salted snack pellets, particularly those made through extrusion, should be classified under HS 2106 (Namkeens), leading to disputes in the field.
What’s New:
- Effective from 10th October 2024, products falling under HS 1905 90 30 (extruded or expanded savoury products) will attract a 12% GST rate. This rate aligns these products with other ready-to-eat preparations like namkeens, bhujia, and mixtures, which are classified under HS 2106.
- However, un-fried or un-cooked snack pellets manufactured through the extrusion process will still attract a 5% GST rate.
- Importantly, the 12% GST rate applies prospectively, meaning that for the period before 10th October 2024, the applicable GST rate remains 18%.
2. GST Rate on Roof-Mounted Air Conditioning Machines for Railways
Another clarification pertains to the classification of roof-mounted package unit (RMPU) air conditioning machines used in railways. Businesses sought clarification on whether these machines should fall under HS 8415 (with a 28% GST rate) or HS 8607 (with an 18% GST rate).
What’s New:
- Air conditioning machines fall under HS 8415, which attract a 28% GST rate, as per S. No. 119 of Schedule IV of the GST notifications.
- Goods classified under HS 8607 (including parts for railways and locomotives) attract a 18% GST rate. However, machines like air conditioners, classified under HS 8415, are excluded from the parts category under HS 8607.
- Therefore, RMPU air conditioning machines for railways will continue to be classified under HS 8415, attracting a 28% GST rate.
3. GST Rate on Seats for Cars and Motorcycles
The classification and GST rate for seats in four-wheeled vehicles (cars) and two-wheeled vehicles (motorcycles) was also clarified, given the ongoing confusion in the industry.
What’s New:
- Motorcycle seats (classified under HS 8714) attract a 28% GST rate, as per the explanatory notes for the heading.
- Car seats (classified under HS 9401) attract an 18% GST rate, as per the explanatory notes for this category.
- Important Update: To align car seat GST rates with motorcycle seats, from 10th October 2024, car seats (classified under HS 9401) will now attract a 28% GST rate, bringing parity between the rates for car and motorcycle seats.
4. Implementation of These Changes
The Trade Circular also mentioned that if businesses face any difficulties in implementing these updates, they should bring them to the notice of the Commissioner for further clarification.
Conclusion:
These clarifications are significant for businesses in sectors such as food manufacturing, air conditioning, and automotive parts. The revised GST rates and classifications will help streamline operations and ensure uniformity in tax applications across West Bengal. It’s important for businesses to note that these changes are prospective, with some adjustments in GST rates applicable from 10th October 2024.
