CBIC Issues Clarification Regarding GST Rates And Classification Of Goods On 48th GST Council Recommendation

The Central Board of Indirect Taxes and Customs (CBIC) has issued the clarification regarding GST rates and classification of certain goods based on the recommendations of the GST Council in its 48th meeting held on 17th December 2022.

1. 18% GST Applicable On Rab

Rab can be correctly classified under the heading 1702 and is subject to an 18% GST rate.

A request for clarification regarding the definition of "Rab" has been received. It has been stated that "Rab" refers to "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" under the U.P. Rab (Movement Control Order), 1967. In its ruling in Krishi Utpadan Mandi Samiti vs. M/s Shankar Industries and others, the Supreme Court made a distinction between Rab and molasses. Therefore, because Rab can be distinguished from molasses, it cannot be classified under the heading 1703.

2. By-Products Of Milling Of Dal/Pulses Exempted From GST w.e.f. 1st January 2023

Requests for clarification on the applicable GST rate for by-products of milling dal and pulses like chilka, khanda, and churi/chuni have been received.

In its 48th meeting, the GST Council made the recommendation to fully exempt the supply of the in question goods, regardless of their end-use. Consequently, starting on January 1, 2023, the goods will be exempt from GST.

3. 28% GST & 12% Cess Applicable On Carbonated Beverages of Fruit Drink’ or ‘Carbonated Beverages with Fruit Juice’

HS 2202 99 is the code for "Carbonated Beverages of Fruit Drink" or "Carbonated Beverages with Fruit Juice." The products are subject to a 12% Compensation Cess and a 28% GST.

4. 18% GST on Snack pellets manufactured through the extrusion process

The extruded snack pellets (such as "fryums") are properly classified under tariff item 1905 9030, which includes items with the description "Extruded or expanded products, savoury or salted," and are therefore subject to GST at the rate of 18%.

5. 28% Compensation Cess On SUVs

On motor vehicles falling under heading 8703 that meet all four requirements—popularly referred to as SUVs; engine capacity exceeds 1,500 cc; length exceeds 4,000 mm; and ground clearance is 170 mm and above—the Compensation Cess at the rate of 22% is applicable.

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

On the basis of the recommendation of the GST Council in its 47th Meeting, held in June 2022, the IGST rate has been increased from 5% to 12% on goods, falling under any Chapter, specified in the list annexed to the notification No. 3/2017-Integrated Tax (Rate), dated the 28th June 2017, when imported for the specified purpose (like Petroleum operations/Coal bed methane operations) and subject to the relevant conditions prescribed in the notification.

Circular No. 189/01/2023-GST

Date: 13.01.2023

Click Here To Read The Circular