Circular No. 200/12/2023-GST on GST Rates: Key Clarifications

The Ministry of Finance, Government of India, has issued a comprehensive circular (No. 200/12/2023-GST) dated August 1, 2023, providing vital clarifications on Goods and Services Tax (GST) rates and the classification of specific goods. Let’s delve into the details:

1. Un-fried Snack Pellets:

• Earlier, extruded snack pellets, like ‘fryums,’ were categorized under a higher GST rate. However, the circular brings clarity by stating that un-cooked or un-fried extruded snack pellets, regardless of nomenclature, will now attract a reduced GST rate of 5% from July 27, 2023. The circular also regularizes any past doubts regarding the applicability of GST on these products for the period before the mentioned date.

2. Fish Soluble Paste:

• Fish soluble paste, which was initially taxed at 18%, has seen a reduction in GST rate to 5%, aligning with the recommendations of the GST Council. This change is effective from July 27, 2023. The circular also addresses any past uncertainties on the GST rate for fish soluble paste up to July 27, 2023.

3. Desiccated Coconut:

• Recognizing interpretational issues regarding the GST rate on desiccated coconut (HSN 0801), the circular regularizes the matter for the period from July 1, 2017, to July 27, 2017, based on the GST Council’s recommendations.

4. Biomass Briquettes:

• Similar to desiccated coconut, the circular regularizes the GST rate issue for biomass briquettes for the period from July 1, 2017, to October 12, 2017, considering interpretational challenges.

5. Supply of Raw Cotton by Agriculturists:

• The circular clarifies that the supply of raw cotton, including kala cotton, from agriculturists to cooperatives is a taxable supply. Such transactions, involving a registered cooperative, attract a 5% GST on a reverse charge basis, aligning with the GST Council’s recommendation. The circular also regularizes any past uncertainties on this matter.

6. Imitation Zari Thread or Yarn:

• Earlier, imitation zari thread or yarn was taxed at 12%. The circular announces a reduction in the GST rate for these products to 5%, effective from July 27, 2023. It regularizes any confusion in the trade regarding the GST rate on these items up to the specified date.

7. Plates, Cups made from Areca Leaves:

• The circular regularizes issues related to the GST on plates and cups made from areca leaves on an “as-is” basis for the period before October 1, 2019.

8. Goods falling under HSN 9021:

• Concerns were raised about the GST rates applicable to certain medical goods falling under HSN heading 9021. The circular clarifies that a uniform rate of 5% applies to such goods from July 18, 2022. It regularizes any past doubts regarding the GST rate on these products on an “as-is” basis.

9. Refunds and Implementation:

• Importantly, the circular emphasizes that no refunds will be granted for cases where GST has already been paid at a higher rate in any of the mentioned scenarios.
• Any difficulties in implementing the circular’s provisions are requested to be brought to the notice of the authorities.

This circular provides much-needed clarity on GST rates and classifications, aiming to resolve past uncertainties and ensure uniformity in tax applicability.