CBIC clarifies on applicability of GST rates and classification of goods

Oct 14, 2019 | by Avantis RegTech Legal Research Team


The Central Board of Indirect Taxes and Customs (CBIC) on October 11, 2019, has given clarification on applicability of GST rates and classification of goods.

Whereas, CBIC received representations seeking clarification in respect of applicable GST rates on 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.

The detailed clarification is as under:

(i)                  Classification of leguminous vegetables when subject to mild heat treatment (parching):

CBIC clarified that such leguminous vegetables which are subjected to mere heat treatment for removing moisture, or for softening and puffing or removing the skin, and not subjecting to any other processing or addition of any other ingredients such as salt and oil, attract GST at the rate of 5% if branded and packed in a unit container In all other cases such goods would be exempted from GST

(ii)                Classification and applicable GST rate on Almond Milk:

CBIC has clarified that 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. Almond milk is classified under the residual entry and attract GST rate of 18%.

(iii)               Applicable GST rate on Mechanical Sprayer:

CBIC clarified that 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.). Therefore, it attracts 12% of GST.

(iv)               Clarification regarding taxability of imported stores by the Indian Navy:

CBIC has clarified that imported stores for use in navy ships are entitled to exemption from GST.  

(v)                Clarification regarding taxability of goods imported under lease:

CBIC clarified that the expression “taken on lease/imported under lease” (in S. No. 557A and 557B respectively of Notification No. 50/2017-Customs dated June 30, 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, have been aligned with Condition No. 102 of the said notification [vide Notification No. 34/2019-Customs dated September 30, 2019 with effect from October 01, 2019] to address the concerns raised.

(vi)         Applicability of GST rate on parts for the manufacture solar water heater and system:

CBIC has clarified that parts including Solar Evacuated Tube falling under chapter 84, 85 and 94 for the manufacture of solar water heater and system will attract 5% GST.

(vii)          Applicability of GST on the parts and accessories suitable for use solely or principally with a medical device:

CBIC has clarified that 12% IGST would be applicable on the parts and accessories suitable for use solely or principally with a medical device.

[Circular No. 113/32/2019-GST]


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