PRESS
RELEASE ON GST RATE CHANGES
Recommendations made by the GST Council as per
discussions in its 23rd Meeting on 10th November, 2017
held at Guwahati
This
information is being uploaded immediately after the discussions in the 23rd
GST Council Meeting.
a)
In the meeting held today, that is 10th
November, 2017, the Council has recommended major relief in GST rates on
certain goods and services. These recommendations spread across many sectors
and across commodities.
b)
As per these recommendations, the list of 28%
GST rated goods is recommended to be pruned substantially, from 224 tariff
headings [about 18.5% of total tariff headings at 4-digit] to only 50 tariff
headings including 4 headings which have been partially reduced to 18% [about 4% of total tariff headings at
4-digit].
c)
Further, the Council has recommended changes
in GST rates on a number of goods, so as to rationalise the rate structure with
a view to minimise classification disputes.
d)
The Council has also recommended issuance of
certain clarifications to address the grievance of trade on issues relating to
GST rates and taxability of certain goods and services.
e)
On the services side also, the Council
recommended changes in GST rates to provide relief to aviation & handicraft
sectors and restaurants.
2. Major
recommendations of the Council are summarised below.
(I) Pruning
of list of 28% rated goods:
The Council
has recommended reduction in GST rate from 28% to 18% on goods
falling in 178 headings at 4-digit level (including 4 tariff heading that are
partially pruned). After these changes, only 50 items will attract GST rate of
28%.
a) Goods
on which the Council has recommended reduction in GST rate from 28% to 18% include:
v Wire,
cables, insulated conductors, electrical insulators, electrical plugs,
switches, sockets, fuses, relays, electrical connectors
v Electrical
boards, panels, consoles, cabinets etc for electric control or distribution
v Particle/fibre
boards and ply wood. Article of wood, wooden frame, paving block
v Furniture,
mattress, bedding and similar furnishing
v Trunk,
suitcase, vanity cases, brief cases, travelling bags and other hand bags, cases
v Detergents,
washing and cleaning preparations
v Liquid
or cream for washing the skin
v Shampoos;
Hair cream, Hair dyes (natural, herbal or synthetic) and similar other goods;
henna powder or paste, not mixed with any other ingredient;
v Pre-shave,
shaving or after-shave preparations, personal deodorants, bath preparations,
perfumery, cosmetic or toilet preparations, room deodorisers
v Perfumes
and toilet waters
v Beauty
or make-up preparations
v Fans,
pumps, compressors
v Lamp
and light fitting
v Primary
cell and primary batteries
v Sanitary
ware and parts thereof of all kind
v Articles
of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary
ware of plastic
v Slabs
of marbles and granite
v Goods
of marble and granite such as tiles
v Ceramic
tiles of all kinds
v Miscellaneous
articles such as vacuum flasks, lighters,
v Wrist
watches, clocks, watch movement, watch cases, straps, parts
v Article
of apparel & clothing accessories of leather, guts, furskin, artificial fur
and other articles such as saddlery and harness for any animal
v Articles
of cutlery, stoves, cookers and similar non electric domestic appliances
v Razor
and razor blades
v Multi-functional
printers, cartridges
v Office
or desk equipment
v Door,
windows and frames of aluminium.
v Articles
of plaster such as board, sheet,
v Articles
of cement or concrete or stone and artificial stone,
v Articles
of asphalt or slate,
v Articles
of mica
v Ceramic
flooring blocks, pipes, conduit, pipe fitting
v Wall
paper and wall covering
v Glass
of all kinds and articles thereof such as mirror, safety glass, sheets,
glassware
v Electrical,
electronic weighing machinery
v Fire
extinguishers and fire extinguishing charge
v Fork
lifts, lifting and handling equipment,
v Bull
dozers, excavators, loaders, road rollers,
v Earth
moving and levelling machinery,
v Escalators,
v Cooling
towers, pressure vessels, reactors
v Crankshaft
for sewing machine, tailor’s dummies, bearing housings, gears and gearing; ball
or roller screws; gaskets
v Electrical
apparatus for radio and television broadcasting
v Sound
recording or reproducing apparatus
v Signalling,
safety or traffic control equipment for transports
v Physical
exercise equipment, festival and carnival equipment, swings, shooting
galleries, roundabouts, gymnastic and athletic equipment
v All
musical instruments and their parts
v Artificial
flowers, foliage and artificial fruits
v Explosive,
anti-knocking preparation, fireworks
v Cocoa
butter, fat, oil powder,
v Extract,
essence ad concentrates of coffee, miscellaneous food preparations
v Chocolates,
Chewing gum / bubble gum
v Malt
extract and food preparations of flour, groats, meal, starch or malt extract
v Waffles
and wafers coated with chocolate or containing chocolate
v Rubber
tubes and miscellaneous articles of rubber
v Goggles,
binoculars, telescope,
v Cinematographic
cameras and projectors, image projector,
v Microscope,
specified laboratory equipment, specified scientific equipment such as for
meteorology, hydrology, oceanography, geology Solvent,
thinners, hydraulic fluids, anti-freezing preparation
b) Goods
on which the Council has recommended reduction in GST rate from 28% to 12% are:
v Wet
grinders consisting of stone as grinder
v Tanks
and other armoured fighting vehicles
(II) Other changes/rationalisation of GST rates on goods:
a) 18%
to 12%
i.
Condensed milk
ii.
Refined sugar and sugar cubes
iii.
Pasta
iv.
Curry paste, mayonnaise and salad dressings,
mixed condiments and mixed seasoning
v.
Diabetic food
vi.
Medicinal grade oxygen
vii.
Printing ink
viii.
Hand bags and shopping bags of jute and
cotton
ix.
Hats (knitted or crocheted)
x.
Parts of specified agricultural,
horticultural, forestry, harvesting or threshing machinery
xi.
Specified parts of sewing machine
xii.
Spectacles frames
xiii.
Furniture wholly made of bamboo or cane
b) 18% to 5%
i.
Puffed rice chikki, peanut chikki, sesame
chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
ii.
Flour of potatoes put up in unit container
bearing a brand name
iii.
Chutney powder
iv.
Fly ash
v.
Sulphur recovered in refining of crude
vi.
Fly ash aggregate with 90% or more fly ash
content
c) 12%
to 5%
i.
Desiccated coconut
ii.
Narrow woven fabric including cotton
newar [with no refund of unutilised input tax credit]
iii.
Idli, dosa batter
iv.
Finished leather, chamois and
composition leather
v.
Coir cordage and ropes, jute twine, coir
products
vi.
Fishing net and fishing hooks
vii.
Worn clothing
viii.
Fly ash brick
d) 5% to nil
i.
Guar meal
ii.
Hop cone (other than grounded, powdered or in
pellet form)
iii.
Certain dried vegetables such as sweet
potatoes, maniac
iv.
Unworked coconut shell
v.
Fish frozen or dried (not put up in unit
container bearing a brand name)
vi.
Khandsari sugar
e) Miscellaneous
i.
GST rates on aircraft engines from 28%/18% to
5%, aircraft tyres from 28% to 5% and aircraft seats from 28% to 5%.
ii.
GST
rate on bangles of lac/shellac from 3% GST rate to Nil.
(III) Exemption from IGST/GST in certain
specified cases:
i.
Exemption from IGST on imports of
lifesaving medicine supplied free of cost by overseas supplier for patients,
subject to certification by DGHS of Centre or State and certain other
conditions
ii.
Exemption from IGST on imports of goods
(other than motor vehicles) under a lease agreement if IGST is paid on the
lease amount.
iii.
To extend IGST exemption presently
applicable to skimmed milk powder or concentrated milk, when supplied to
distinct person under section 25(4) for use in production of milk for
distribution through dairy cooperatives to where such milk is distributed
through companies registered under the Companies Act.
iv.
Exemption from IGST on imports of
specified goods by a sports person of outstanding eminence, subject to
specified conditions
v.
Exemption from GST on specified goods,
such as scientific or technical instruments, software, prototype supplied to
public funded research institution or a university or IISc, or IITs or NIT.
vi.
Coverage of more items, such as
temporary import of professional equipment by accredited press persons visiting
India to cover certain events, broadcasting equipments, sports items, testing
equipment, under ATA carnet system. These goods are to be re-exported after the
specified use is over.
(IV) Other changes for simplification and
harmonisation or clarification of issues
i.
To clarify that inter-state movement of goods
like rigs, tools, spares and goods on wheel like cranes, not being in the
course of furtherance of supply of such goods, does not constitute a supply.
This clarification gives major compliance relief to industry as there are
frequent inter-state movement of such kind in the course of providing services
to customers or for the purposes of getting such goods repaired or refurbished
or for any self-use. Service provided
using such goods would in any case attract applicable tax.
ii.
To prescribe that GST on supply of raw cotton
by agriculturist will be liable to be paid by the recipient of such supply
under reverse charge.
iii.
Supply of e-waste attracts 5% GST rate.
Concerned notification to be amended to make it amply clear that this rate
applies only to e-waste discarded as waste by the consumer or bulk consumer.
(V) Changes relating to GST rates on certain services
(A) Exemptions / Changes in GST Rates /
ITC Eligibility Criteria
i.
All stand-alone restaurants irrespective of
air conditioned or otherwise, will attract 5% without ITC. Food parcels (or
takeaways) will also attract 5% GST without ITC.
ii.
Restaurants in hotel premises having room
tariff of less than Rs 7500 per unit per day will attract GST of 5% without
ITC.
iii.
Restaurants in hotel premises having room
tariff of Rs 7500 and above per unit per day (even for a single room) will
attract GST of 18% with full ITC.
iv.
Outdoor catering will continue to be at 18%
with full ITC.
v.
GST on services by way of admission to
"protected monuments" to be exempted.
vi.
GST rate on job work services in relation to
manufacture of those handicraft goods in respect of which the casual taxable
person has been exempted from obtaining registration, to be reduced to 5% with
full input tax credit.
(B) Rationalization of certain exemption entries
i.
The existing exemption entries with respect
to services provided by Fair Price Shops to the Central Government, State
Governments or Union Territories by way of sale of food grains, kerosene,
sugar, edible oil, etc. under Public Distribution System (PDS) against
consideration in the form of commission or margin, is being rationalized so as
to remove ambiguity regarding list of items and the category of recipients to
whom the exemption is available.
ii.
In order to maintain consistency, entry at
item (vi) of Sr. No.3 of notification No. 11/2017-CT(R) will be aligned with
the entries at items (ii), (iii), (iv) and (v) of
SI.No.3. [The word “services” in entry (vi)
will be replaced with "Composite supply of Works contract as defined in
clause 119 of Section 2 of CGST Act, 2017"].
iii.
In order to obviate dispute and litigation,
it is proposed that irrespective of whether permanent transfer of Intellectual
Property is a supply of goods or service.-
(i)
permanent transfer of Intellectual Property
other than Information Technology software attracts GST at the rate of 12%; and
(ii)
permanent transfer of Intellectual Property
in respect of Information Technology software attracts GST at the rate of
18%.
(C) Clarifications
i.
It is being clarified that credit of GST paid
on aircraft engines, parts & accessories will be available for discharging
GST on inter–state supply of such aircraft engines, parts & accessories by
way of inter-state stock transfers between distinct persons as specified in
section 25 of the CGST Act.
ii.
A Circular will be issued clarifying that
processed products such as tea (i.e. black tea, white tea etc.), processed
coffee beans or powder, pulses (de-husked or split), jaggery, processed spices,
processed dry fruits & cashew nuts etc. fall outside the definition of
agricultural produce given in notification No. 11/2017-CT(R) and 12/2017-CT(R)
and therefore the exemption from GST is not available to their loading,
packing, warehousing etc.
iii.
A suitable clarification will be issued that
(i) services provided to the Central Government, State Government, Union
territory under any insurance scheme for which total premium is paid by the
Central Government, State Government, Union territory are exempt from GST under
Sl. No. 40 of notification No. 12/2017-Central Tax (Rate); (ii) services provided by State Government by
way of general insurance (managed by government) to employees of the State
government/ Police personnel, employees of Electricity Department or students
are exempt vide entry 6 of notification No. 12/2017-CT(R) which exempts
Services by Central Government, State Government, Union territory or local
authority to individuals.
3. It
is proposed to issue notifications [giving effect to these recommendations of
the Council] on 14th/15th November, 2017, to be effective
from 00hrs on 15th of November, 2017.
