Clarifications Circular on GST Rate and Classification as per 55th GST Council Meeting: AP Commercial Taxes Dept [Read Circular]

The Commercial Taxes Department of Andhra Pradesh has released a comprehensive clarification on the classification and applicable Goods and Services Tax (GST) rates for various goods. The clarifications are based on new recommendations made by the GST Council and reflect the latest policy updates.

Pepper of Genus Piper

The circular confirms that pepper, whether green, white, or black, falls under the category of goods listed in HS Code 0904. It attracts 5% GST as per the state’s tax rules.

Exemption for Agriculturists:

• Agriculturists supplying dried pepper directly from their plantations are exempt from GST.
• No GST registration is required under Section 23(1)(b) of the APGST Act, 2017 for such activities.

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Raisins Supplied by Agriculturists

The same rule that applies to dried pepper also applies to raisins. If an agriculturist grows and sells raisins directly from their land, GST is not applicable. They are also not required to register under the GST Act for this purpose. This helps small farmers avoid tax compliance burdens when selling produce directly.

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Ready-to-Eat Popcorn

This section addresses the confusion over how GST applies to ready-to-eat popcorn, especially when it is flavored or packaged.

Classification:

• HS Code: 2106 90 99 – Popcorn mixed with salt and spices
• HS Code: 1704 90 90 – Popcorn mixed with sugar (e.g., caramel popcorn)

Applicable GST Rates:

• 5% GST: If not pre-packaged and not labelled
• 12% GST: If pre-packaged and labelled
• 18% GST: If it becomes sugar confectionery, such as caramel popcorn

Retroactive Clarification: Any ambiguity regarding tax rate classification on salted/spiced popcorn until 14.02.2025 is regularized on an “as is where is” basis.

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AAC Blocks Made With Fly Ash

Autoclaved Aerated Concrete (AAC) blocks that contain more than 50% fly ash are covered under HS Code 6815. These blocks are commonly used in construction. The GST rate for these blocks is 12%.

If the blocks are made with other materials and fall under HS Code 6810 (like articles of concrete or artificial stone), the applicable GST is 18%. This clarification ensures that AAC blocks with high fly ash content benefit from a lower tax rate.

Compensation Cess on Utility Vehicles

Earlier, a 22% compensation cess was applied to vehicles with an engine capacity above 1500 cc, mostly referring to SUVs.

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However, after the 50th GST Council meeting, a new definition was introduced. Now, any utility vehicle (no matter what it is called) will attract this cess if it meets all three conditions:

• Engine capacity more than 1500 cc
• Length more than 4000 mm
• Ground clearance of 170 mm or more (measured when the vehicle is empty)

This rule became effective from July 26, 2023, as per Notification No. 03/2023. The circular clears up confusion about the start date and confirms that these rules apply only from that date onward.

This circular helps to remove doubts about GST classifications and rates for several important goods, especially for farmers, food manufacturers, and builders.

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