GST Council Streamlines Rates & Applicability: Circulars 200/12/2023-GST & 201/13/2023-GST Unveiled!
Introduction:
The Government of India’s Ministry of Finance, Department of Revenue (Tax Research Unit), has recently issued two circulars, Circular No. 200/12/2023-GST and Circular No. 201/13/2023-GST, providing clarifications on the rates and classification of certain goods and services based on the recommendations of the GST Council in its 50th meeting held on 11th July 2023. These clarifications aim to address genuine doubts and ensure uniformity in the application of GST across various sectors.
1. Un-fried or un-cooked snack pellets:
Based on the recommendations of the GST Council, un-fried or un-cooked snack pellets, manufactured through the process of extrusion, will now attract a GST rate of 5% under CTH 1905. This reduced rate will be effective from 27th July 2023. Ready-to-eat extruded snack pellets will continue to attract 18% GST.
2. Fish Soluble Paste:
The GST rate on fish soluble paste, falling under CTH 2309, has been reduced from 18% to 5% with effect from 27th July 2023.
3. Desiccated coconut and Biomass briquettes:
In view of genuine interpretational issues, the GST Council has regularized the issues related to the applicability of GST rates on desiccated coconut and biomass briquettes for past periods up to 27th July 2023 on an “as is” basis.
4. Imitation Zari thread or yarn:
The GST rate on imitation zari thread or yarn known by any name in trade parlance has been reduced from 12% to 5% with effect from 27th July 2023. The issue for past periods up to 27th July 2023 has been regularized on an “as is” basis.
5. Supply of raw cotton by agriculturist to cooperatives:
Supply of raw cotton from agriculturists to cooperatives, being a registered person, attracts 5% GST on reverse charge basis under notification no. 43/2017-Central Tax (Rate) dated 14th November 2017. The issue for past periods prior to this clarification is regularized on an “as is” basis.
6. Plates and cups made from areca leaves:
The GST Council has regularized the issues relating to GST on plates and cups made from areca leaves for the period prior to 1st October 2019 on an “as is” basis.
7. Goods falling under HSN 9021:
All goods falling under HSN heading 9021 will attract a GST rate of 5% based on the recommendations of the GST Council, and this regularization is applicable for past periods as well. However, no refunds will be granted for cases where GST has already been paid at a higher rate of 12%.
1. Services supplied by a director of a company:
Services supplied by a director of a company or body corporate to the company or body corporate in his private or personal capacity, such as renting of immovable property, are not taxable under Reverse Charge Mechanism (RCM). Only services supplied by a director in the capacity of a director of the company or body corporate are taxable under RCM.
2. Supply of food or beverages in cinema hall:
The supply of food or beverages in a cinema hall is taxable as ‘restaurant service’ under GST at the rate of 5% as long as the supply is provided independently of the cinema exhibition service. If the sale of cinema tickets and supply of food and beverages are bundled together and constitute a composite supply, the entire supply will attract GST at the rate applicable to the service of cinema exhibition, the principal supply.
Conclusion: These circulars provide much-needed clarity on the GST rates and applicability of certain goods and services. By regularizing past issues and reducing confusion, the GST Council aims to streamline the tax regime and facilitate smooth business operations across various sectors. Businesses are advised to carefully review the circulars and ensure compliance with the revised GST rates and regulations.
Sources: https://taxinformation.cbic.gov.in/
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