CBIC clarifies GST Rates on Items as per Council’s Decision [Read Circular]

CBIC - GST Rates - Council’s Decision - GST Council Meeting - Taxscan

The Central Board of Indirect Taxes and Customs (CBIC) has clarified the GST rates applicable on certain items as per the recommendations of the GST Council meeting held on 29th and 30th of June.

The circular released by the Board today said that electrically operated vehicle including three-wheeled electric vehicle means vehicle that runs solely on electrical energy derived from an external source or from electrical batteries. Therefore, the fitting of batteries cannot be considered as a concomitant factor for defining a vehicle as an electrically operated electric vehicle.

Noting that the WCO’s HSN Explanatory notes have also not considered batteries to be a component, whose absence changes the essential character of an incomplete, unfinished or unassembled vehicle, the Board has clarified that electrically operated vehicle is to be classified under HSN 8703 even if the battery is not fitted to such vehicle at the time of supply and thereby attract GST at the rate of 5% in terms of entry 242A of Schedule I of notification No. 1/2017-Central Tax (Rate).

Regarding, minor polished stones, the Board said that “Napa Stone is a variety of dimensional limestone, which is a brittle stone and cannot be subject to extensive mirror polishing. Currently, S. No. 123 of Schedule-I prescribes GST rate of 5% for ‘Ecaussine and other calcareous monumental or building stone; alabaster [other than marble and travertine], other than mirror polished stone which is ready to use.’ However, being brittle in nature, stones like Napa Stone, even though ready for use, are not subject to extensive polishing. Therefore, such minor polished stones do not qualify as mirror polished stones.”

The circular also clarified that supply of treated sewage water, falling under heading 2201, is exempt under GST. Further, to clarify the issue, the word ‘purified’ is being omitted from the above-mentioned entry vide notification No. 7/2022-Central Tax (Rate), dated the 13th July, 2022.

With regard to the GST rate applicable on Nicotine Polacrilex Gum, it was clarified that it is commonly applied orally and is intended to assist tobacco use cessation is appropriately classifiable under tariff item 2404 91 00 with applicable GST rate of 18% [Sl. No. 26B in Schedule III of notification no. 1/2017-Central Tax (Rate), dated the 28th June, 2017].

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Case Number:   Circular No. 179/11/2022-GST

Date of Judgement:   3rd August, 2022

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