12% GST on Laterals / parts to be used with Sprinklers or Drip Irrigation System: CBIC [Read Circular]

drp - GST- Sprinklers - Drip Irrigation System - CBIC - taxscan

The Central Board of Indirect Taxes and Customs (CBIC) has clarified that laterals/parts to be used solely or principally with sprinklers or drip irrigation system would attract GST at a rate of 12%.

There were ambiguities over the rate of tax applicable on parts of Sprinklers or Drip Irrigation System, when they are supplied separately ( i.e. not along with entire sprinklers or drip irrigation system). In the light of various representations received by the Board in this regard, the GST Council held on the 28th May, 2021 discussed the matter in details and recommended the Government to provide clarity on the issue.

The circular stated that the GST rate on Sprinklers or Drip Irrigation System along with their laterals/parts are governed by S.No. ‘195B’ under Schedule II of notification No. 1/2017- Central Tax (Rate), dated 28th June, 2017.

“The intention of this entry has been to cover laterals (pipes to be used solely with with sprinklers/drip irrigation system) and such partsthat are suitable for use solely or principally with ‘sprinklers or drip irrigation system’, as classifiable under heading 8424 as per Note 2 (b) to Section XVI to the HSN. Hence, laterals/parts to be used solely or principally with sprinklers or drip irrigation system, which are classifiable under heading 8424, would attract a GST of 12%, even if supplied separately. However, any part of general use, which gets classified in a heading other than 8424, in terms of Section Note and Chapter Notes to HSN, shall attract GST as applicable to the respective heading,” the circular said.

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