Summary: The Central Board of Indirect Taxes and Customs (CBIC) has published Frequently Asked Questions (FAQs) on issues relating to goods, dated 9 October 2026, explaining recommendations and clarifications associated with the 57th GST Council meeting. The FAQs address the classification and GST treatment of various goods, the applicability of concessional rates, input tax credit (ITC), and proposed compliance requirements for specified waste and scrap transactions.
The clarifications cover seaweed-extract-based bio-stimulants registered under the Fertiliser Control Order, 1985, the classification of toys under the Customs Tariff Act, 1975, and the eligibility of second-hand car dealers for the GST margin scheme when claiming ITC on business inputs and services. They also address the classification of sublimation paper under heading 4809 and the proposed alignment of GST rates on retreaded tractor tyres with those applicable to new tractor tyres.
A significant part of the FAQs concerns the proposed introduction of 2% Tax Deducted at Source (TDS) on specified waste and scrap supplied between registered persons and the Reverse Charge Mechanism (RCM) for supplies from unregistered persons to registered persons. The FAQs explain registration thresholds, tax payment responsibilities and recipient compliance obligations, including filing Form GSTR-7 and issuing TDS certificates. They also cover the proposed nil GST rate for psyllium seeds, irrespective of whether they are fresh, chilled, frozen or dried.
The CBIC clarifies that the changes will be implemented through the relevant notifications and circulars to be uploaded on its website. The recommendations should therefore be distinguished from the formal legal instruments implementing them.
Economy
Frequently Asked Questions (FAQs) on issues related to goods
Posted On: 09 OCT 2026 4:53PM
(Disclaimer: Answers are only for educational and guidance purposes and do not hold any legal validity. For complete details, please refer to the notifications, circulars etc issued in this regard)
Q1.What is the classification of sea-weed extract based bio-stimulants?
Ans: 57th GST Council has clarified that sea-weed extract based bio-stimulants, registered under Schedule VI to the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985 are classifiable under heading 3101 as fertilisers (vide S. No. 237 of Schedule I of Notification No. 9/2025-Central Tax (Rate), dated 17.09.2025). GST council has also recommended to regularise the past cases on “as is where is” basis.
Q2. Are all sea-weed extract based products classifiable under S. No. 237 of Schedule I of Notification No. 9/2025-Central Tax (Rate), dated 17.09.2025?
Ans: No. All sea-weed extract based products are not classifiable under S. No. 237 of Schedule I of Notification No. 9/2025-Central Tax (Rate), dated 17.09.2025. Only those sea-weed extract based bio-stimulants that are registered under the Fertiliser Control Order, 1985 are classifiable under the said entry.
Q3. Whether sea-weed extract based products containing Plant Growth Regulators (PGRs) would be classified under S. No. 237 of Schedule I of Notification No. 9/2025-Central Tax (Rate), dated 17.09.2025?
Ans: Sea-weed extract based products containing Plant Growth Regulators (PGRs) would not qualify as bio-stimulants under the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985 and, accordingly, would not be classified under S. No. 237 of Schedule I of Notification No. 9/2025-Central Tax (Rate), dated 17.09.2025.
Q4. What are the recommendations of the GST Council with regards to the entry pertaining to toys in the GST rate notifications?
Ans: The Council has clarified that the notification entries related to toys in the GST Rate notification (S. No. 497 of Schedule I and S. No. 616 of Schedule II of notification No. 09/2025-Central Tax (Rate) dated 17.09.2025) also include all other categories of toys
mentioned in the chapter heading 9503 of the Customs Tariff Act, such as dolls, puzzles and other toys, and is not restricted only to tricycles, pedal cars and scooters which are mentioned in the notification.
Q5. Are second-hand car dealers barred from availing the concessional rate of GST under the GST margin scheme if they avail ITC on repair and maintenance services, spares, etc. used in the course of business?
Ans: No. Benefit of concessional rate of GST under GST margin scheme vide notification No. 8/2018-Central Tax (Rate), notification No. 9/2018-Integrated Tax (Rate) and notification No. 1/2018-Compensation Cess (Rate), all dated 25.01.2018, for supply of second-hand cars can be taken even if ITC is availed on the input goods and inputs services used in furtherance of business. However, ITC cannot be availed on tax paid on purchase of second-hand vehicles, if dealer of the said second-hand vehicles intends to take concessional rate of GST under the margin scheme.
Q6. What is the classification of sublimation paper?
Ans: There were disputes in the field regarding the correct classification of sublimation paper i.e whether sublimation paper is classified under sub-heading 4810 22 or under heading 4809. GST Council in its 57th meeting has clarified that Sublimation paper is classifiable under heading 4809 (Sr. No. 176 of Schedule II of the notification No. 9/2025-CTR dated 17.09.2025). Further, GST Council has also recommended regularization of past period on “as is where is” basis so as to resolve the past disputes.
Q7. What is the GST treatment on retreaded tractor tyres?
Ans : The Council has recommended to correct the anomaly of GST treatment of retreaded tractor tyres by aligning its GST rate with GST rate applicable on new tractor tyres.
Q8. What has the 57th GST Council recommended regarding waste and scrap of plastics, waste and scarp of tyres, electrical and electronics waste and scrap and used cooking oil?
Ans : 57th GST Council has recommended introduction of Tax Deducted at Source (TDS) at the rate of 2% on the supply of waste and scrap of plastics, waste and scarp of tyres, electrical and electronics waste and scrap and used cooking oil, by a registered person to a registered person. The Council has also recommended the introduction of Reverse Charge Mechanism (RCM) on the supply of such waste and scrap by an unregistered person to a registered person provided that the supplier shall take registration as and when it crosses threshold limit and the recipient who is liable to pay under RCM shall pay tax even if supplier is under threshold.
Q9. What is the existing mechanism based on which this recommendation regarding waste and scrap of plastics, waste and scarp of tyres, electrical and electronics waste and scrap and used cooking oil is made?
Ans : The mechanism is on the lines of the TDS and RCM framework already in place for metal scrap which was introduced based on the recommendations of the 54th GST Council meeting. Under that framework, TDS at the rate of 2% under Section 51 of the CGST Act, 2017 is to be paid on the supply of metal scrap by a registered person to a registered person, and tax has to be paid on the RCM basis by the recipients on the supply of metal scrap by an unregistered person to a registered person.
Q10. When is TDS at 2% applicable on waste and scrap of plastics, waste and scarp of tyres, electrical and electronics waste and scrap and used cooking oil?
Ans : TDS at the rate of 2% is applicable when a registered person supplies above specified waste and scrap to another registered person. The recipient (buyer) is required to deduct tax at the rate of 2% from the payment made to the supplier and deposit the same with the Government.
Q11. When is Reverse Charge Mechanism (RCM) applicable on waste and scrap of plastics, waste and scarp of tyres, electrical and electronics waste and scrap and used cooking oil?
Ans : RCM is applicable when an unregistered person supplies above specified waste and scrap to a registered person. In such cases, the liability to pay GST on the supply shifts to the recipient, i.e. the registered buyer.
Q12. Is the supplier required to take registration under GST for supply of waste and scrap of plastics, waste and scarp of tyres, electrical and electronics waste and scrap and used cooking oil?
Ans : The supplier is required to take registration under GST when the aggregate turnover crosses the threshold limit prescribed under Section 22 of the CGST Act, 2017. Once the threshold is crossed, the supplier must obtain registration and the TDS provisions will apply to subsequent supplies made to registered persons.
Q13. If the supplier of waste and scrap of plastics, waste and scarp of tyres, electrical and electronics waste and scrap and used cooking oil is below the threshold limit and is unregistered, is the recipient still required to pay tax under RCM?
Ans : Yes. The recipient who is a registered person is required to pay GST under RCM on the supply received from an unregistered person, even if the unregistered supplier is below the threshold limit for registration.
Q14. What are the compliance obligations of the recipient (buyer) of waste and scrap of plastics, waste and scarp of tyres, electrical and electronics waste and scrap and used cooking oil under this mechanism?
Ans : The recipient (buyer) who is a registered person is required to:
- deduct TDS at 2% on purchases of such specified waste and scrap from registered suppliers and file the TDS return in Form GSTR-7;
- issue a TDS certificate to the supplier in accordance with the rules prescribed;
- pay GST under RCM on purchases of these items from unregistered suppliers and report the same in the return.
Q15. What are the recommendations of 57th GST Council with regards to Psyllium seeds (Isobgul/ Isobgol)?
Ans : In order to remove the ambiguity and provide clarity, 57th GST Council has recommended to create a separate entry for Psyllium seeds (Isobgul/Isobgol), irrespective of whether it is fresh, chilled, frozen or dried, in the notification No. 10/2025-Central Tax (Rate), dated 17.09.2025, which prescribes Nil rate of GST.
(The above changes will be implemented by issuance of relevant notifications, circulars, etc. which will be uploaded on the CBIC website (taxinformation.cbic.gov.in))
