GST Rate Changes – Applicable From 01.10.2021

Several notifications have been issued to notify the changes in the applicable rate of GST (including exemptions) pursuant to the decisions taken at the 45^th GST Council Meeting. The given changes are applicable from 01.10.2021. Rates have been increased with a special focus on the industries mainly operating under the inverted rate structure. We have referred to the notifications issued under the CGST Act, 2017 in the present write-up. Parallel notifications have also been issued under the IGST Act, 2017.

The summary of the changes (industry-wise) are as follows:

Renewable energy industry

The rate of tax for the following goods have been increased from 5% to 12% (refer Notification No. 8/2021-CT (Rate)):

Sl. No. of Notification No. 1/2017 – CT (Rate)	Chapter, Heading, Subheading or Tariff item	Description	Rate
201A (Schedule II)	84, 85 or 94	Following renewable energy devices and parts for their manufacture:- (a) Bio-gas plant; (b) Solar power based devices; (c) Solar power generator; (d) Wind mills, Wind Operated Electricity Generator (WOEG); (e) Waste to energy plants / devices; (f) Solar lantern / solar lamp; (g) Ocean waves/tidal waves energy devices/plants; (h) Photo voltaic cells, whether or not assembled in modules or made up into panels. Explanation:- If the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and services, one of which being a taxable service specified in the entry at S. No. 38 of the Table mentioned in the notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 [G.S.R. 690(E)], the value of supply of goods for the purposes of this entry shall be deemed as seventy per cent. of the gross consideration charged for all such supplies, and the remaining thirty per cent. of the gross consideration charged shall be deemed as value of the said taxable service.	12%

Railway industry

The rate of tax for the following goods have been increased from 12% to 18% (refer Notification No. 8/2021-CT (Rate)):

Sl. No. of Notification No. 1/2017 – CT (Rate) (Schedule III)	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
398A	8601	Rail locomotives powered from an external source of electricity or by electric accumulators.	18%
398B	8602	Other rail locomotives; locomotive tenders; such as Diesel electric locomotives, Steam locomotives and tenders thereof	18%
398C	8603	Self-propelled railway or tramway coaches, vans and trucks, other than those of heading 8604.	18%
398D	8604	Railway or tramway maintenance or service vehicles, whether or not self-propelled (for example, workshops, cranes, ballast tampers, track liners, testing coaches and track inspection vehicles).	18%
398E	8605	Railway or tramway passenger coaches, not self-propelled; luggage vans, post office coaches and other special purpose railway or tramway coaches, not self-propelled (excluding those of heading 8604).	18%
398F	8606	Railway or tramway goods vans and wagons, not self-propelled.	18%
398G	8607	Parts of railway or tramway locomotives or rolling-stock; such as Bogies, bissel-bogies, axles and wheels, and parts thereof.	18%
398H	8608	Railway or tramway track fixtures and fittings; mechanical (including electro-mechanical) signalling, safety or traffic control equipment for railways, tramways, roads, inland waterways, parking facilities, port installations or airfields; parts of the foregoing.”;	18%

Packaging industry

The rate of tax for the following goods have been increased from 12% to 18% (refer Notification No. 8/2021-CT (Rate)):

Sl. No. of Notification No. 1/2017 – CT (Rate) (Schedule III)	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
153A	4819	Cartons, boxes, cases, bags and other packing containers, of paper, paperboard, cellulose wadding or webs of cellulose fibres; box files, letter trays, and similar articles, of paper or paperboard of a kind used in offices, shops or the like.	18%

Waste/scrap industry

The rate of tax for the following goods have been increased from 5% to 18% (refer Notification No. 8/2021-CT (Rate)):

Sl. No. of Notification No. 1/2017 – CT (Rate) (Schedule III)	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
101A	3915	Waste, Parings and Scrap, of Plastics.	18%

Printing industry

The rate of tax for the following goods have been increased from 12% to 18% (refer Notification No. 8/2021-CT (Rate)):

Sl. No. of Notification No. 1/2017 – CT (Rate) (Schedule III)	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
157A	4906 00 00	Plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, being originals drawn by hand; hand-written texts; photographic reproductions on sensitised paper and carbon copies of the foregoing.	18%
157B	4907	Unused postage, revenue or similar stamps of current or new issue in the country in which they have, or will have, a recognised face value; stamp-impressed paper; banknotes; cheque forms; stock, share or bond certificates and similar documents of title (other than Duty Credit Scrips).	18%
157C	4908	Transfers (decalcomanias).	18%
157D	4909	Printed or illustrated postcards; printed cards bearing personal greetings, messages or announcements, whether or not illustrated, with or without envelopes or trimmings.	18%
157E	4910	Calendars of any kind, printed, including calendar blocks	18%
157F	4911	Other printed matter, including printed pictures and photographs; such as Trade advertising material, Commercial catalogues and the like, printed Posters, Commercial catalogues, Printed inlay cards, Pictures, designs and photographs, Plan and drawings for architectural engineering, industrial, commercial, topographical or similar purposes reproduced with the aid of computer or any other devices.	18%

Further the concessional rate of tax of 12% applicable on the services by way of printing of all goods falling under Chapter 48 or 49 [including newspapers, books (including Braille books), journals and periodicals], which attract CGST @ 6 per cent or 2.5 per cent or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer has been omitted. Now all such services shall attract the rate of 18%. The following substituted entry in this regard reads as under (refer Notification no. 06/2021-CT (Rate) :

Sr. No. of Notification No. 11/2017 – CT (Rate)	Description	Rate
27(ii)	Other manufacturing services; publishing, printing and reproduction services; material recovery services	18%

Pen industry

The rate of tax for the following goods have been increased from 12% to 18% (refer Notification No. 8/2021-CT (Rate))):

Sl. No. of Notification No. 1/2017 – CT (Rate) (Schedule III)	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
447	9608	Ball point pens; felt tipped and other porous-tipped pens and markers; fountain pens; stylograph pens and other pens; duplicating stylos; pen holders, pencil holders and similar holders; parts (including caps and clips) of the foregoing articles, other than those of heading 9609.	18%

Carbonated Fruit Drink industry

Hitherto there was confusion as regards the applicable rate of tax on the Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice. Now the following entry has been inserted (refer Notification No. 8/2021-CT (Rate)):

Sl. No. of Notification No. 1/2017 – CT (Rate) (Schedule IV)	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
12B	2202	Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice.	28%

Mining industry

The rate of tax for the following goods have been increased from 5% to 18% (referNotification No. 8/2021-CT (Rate)):

Sl. No. of Notification No. 1/2017 – CT (Rate) (Schedule III)	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
26C	2601	Iron ores and concentrates, including roasted iron pyrites.	18%
26D	2602	Manganese ores and concentrates, including ferruginous manganese ores and concentrates with a manganese content of 20% or more, calculated on the dry weight.	18%
26E	2603	Copper ores and concentrates.	18%
26F	2604	Nickel ores and concentrates.	18%
26G	2605	Cobalt ores and concentrates.	18%
26H	2606	Aluminium ores and concentrates.	18%
26I	2607	Lead ores and concentrates.	18%
26J	2608	Zinc ores and concentrates.	18%
26K	2609	Tin ores and concentrates.	18%
26L	2610	Chromium ores and concentrates.	18%

Amusement parks industry

Hitherto there was confusion as regards the applicable rate of tax (i.e. 18% or 28%) as regards the supply of services by way of admission to various amusement parks via-a-vis casinos or race clubs or sporting events like IPL. Now the following entries have been substituted as under (refer Notification no. 06/2021-CT (Rate)) :

Sr. No. of Notification No. 11/2017 – CT (Rate)	Description	Rate
34(iii)	Services by way of admission to; (a) theme parks, water parks and any other place having joy rides, merry- go rounds, go carting, or (b) ballet, – other than any place covered by (iiia) below	18%
34(iiia)	Services by way of admission to (a) casinos or race clubs or any place having casinos or race clubs or (b) sporting events like Indian Premier League.	28%

Pharmaceutical industry

The concessional rates/exemptions have been granted on the specified goods as under (the same shall be applicable only till 31.12.2021) (refer Notification No. 12/2021-CT (Rate)):

Sl. No.	Chapter, Heading, Subheading or Tariff item	Description of Goods	Rate
1	30	Tocilizumab	Nil
2	30	Amphotericin B	Nil
3	30	Remdesivir	5%
4	30	Heparin (anti-coagulant)	5%
5	30	Itolizumab	5%
6	30	Posaconazole	5%
7	30	Infliximab	5%
8	30	Bamlanivimab & Etesevimab	5%
9	30	Casirivimab & Imdevimab	5%
10	30	2-Deoxy-D-Glucose	5%
11	30	Favipiravir	5%

Bio-diesel industry

Hitherto the applicable rate of tax on bio-diesel was 12%. Now two separate entries have been inserted in this regard as under (refer Notification No. 8/2021-CT (Rate)):

Sr. No. of Notification No. 1/2017 – CT (Rate)	Description	Rate
186A (Schedule I)	Bio-diesel supplied to Oil Marketing Companies for blending with High Speed Diesel	5%
80A (Schedule II)	Bio-diesel (other than bio-diesel supplied to Oil Marketing Companies for blending with High Speed Diesel)	12%

Export freight (for exporters)

The exemption in existence as regards the export freight has been extended till 30.09.2022. The amended entries read as under (refer Notification no. 07/2021-CT (Rate)):

Sr. No. of Notification No. 12/2017 – CT (Rate)	Description	Rate
19A	Services by way of transportation of goods by an aircraft from customs station of clearance in India to a place outside India	Nil (till 30.09.2022)
19B	Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India.	Nil (till 30.09.2022)

Job-work (alcohol)

There was confusion as regards the applicable rate of tax on the job work transactions in relation to the manufacture of alcoholic liquor for human consumption. If the alcoholic liquor for human consumption is equated with food products, the rate of tax was 5%. Now the following new entry has been inserted in this regard as under (refer Notification no. 06/2021-CT (Rate)) :

Sr. No. of Notification No. 11/2017 – CT (Rate)	Description	Rate
26(ica)	Services by way of job work in relation to manufacture of alcoholic liquor for human consumption	18%

Intellectual Property (IP) right

Hitherto there was a distinction as regards the applicable rate of tax on the supply of services in the nature of temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP). The applicable rate of tax was 12% if the IP was in respect of goods (other than software) and the applicable rate of tax was 18% if the IP is in respect of software. The said distinction as regards the applicable rate of tax has now been done away with. The amended entry is as under (refer Notification no. 06/2021-CT (Rate) ::

Sr. No. of Notification No. 11/2017 – CT (Rate)	Description	Rate
17(ii)	Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right	18%

Charitable entities

Hitherto certain specified services supplied by/to the entities registered u/s 12AA of the Income Tax Act, 1961 enjoyed exemption/concessional rate of tax. In view of the amendments made under the Income Tax Act, 1961 in terms of insertion of Sec. 12AB (requiring the charitable entities to henceforth obtain registration under the said new provision), an issue had arisen as regards the exemptions/concessions under GST that were still linked with Sec. 12AA and not Sec. 12AB. Now the said anomaly has been corrected by incorporating reference to Sec. 12AB in the following entries (refer Notification no. 06/2021-CT (Rate) & Notification no. 07/2021-CT (Rate) :

Sr. No. of Notification No. 11/2017 – CT (Rate) or 12/2017 CT (Rate)	Description	Rate
3(iv)(g)(NN 11/2017)	Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, {other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above} supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (g) a building owned by an entity registered under section 12AA or 12AB of the Income Tax Act, 1961 (43 of 1961), which is used for carrying out the activities of providing, centralised cooking or distribution, for mid-day meals under the mid-day meal scheme sponsored by the Central Government, State Government, Union territory or local authorities.	12%
1(NN 12/2017)	Services by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 (43 of 1961) by way of charitable activities.	Nil
9D(NN 12/2017)	Services by an old age home run by Central Government, State Government or by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 (43 of 1961) to its residents (aged 60 years or more) against consideration upto twenty-five thousand rupees per month per member, provided that the consideration charged is inclusive of charges for boarding, lodging and maintenance.	Nil
74A(NN 12/2017)	Services provided by rehabilitation professionals recognised under the Rehabilitation Council of India Act, 1992 (34 of 1992) by way of rehabilitation, therapy or counselling and such other activity as covered by the said Act at medical establishments, educational institutions, rehabilitation centers established by Central Government, State Government or Union territory or an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 (43 of 1961).	Nil
80(NN 12/2017)	Services by way of training or coaching in recreational activities relating to- (a) arts or culture, or (b) sports by charitable entities registered under section 12AA or 12AB of the Income-tax Act.	Nil

Other changes

a. Exemption has been granted to the services by way of granting National Permit to a goods carriage to operate throughout India / contiguous States (refer Notification no. 07/2021-CT (Rate)).

b. Exemption has been granted to the provided to the Central Government, State Government, Union territory administration under any training programme for which 75% or more of the total expenditure is borne by the Central Government, State Government, Union territory administration (refer Notification no. 07/2021-CT (Rate)).

c. Exemption has been granted to the services by way of right to admission to the events organised under AFC Women’s Asia Cup 2022 (refer Notification no. 07/2021-CT (Rate).

d. Exemption in respect of the services of leasing of assets (rolling stock assets including wagons, coaches, locos) by the Indian Railways Finance Corporation to Indian Railways has been withdrawn (refer Notification no. 07/2021-CT (Rate)).

e. Tamarind seeds meant for any use other than sowing shall attract the tax @ 5% (refer Notification No. 8/2021-CT (Rate) & 9/2021 – CT (Rate)).

f. The following entry has been inserted in Notification No.4/2017-CT (Rate) to provide for the payment of tax under RCM (refer Notification No. 10/2021 – CT (Rate)):

S. No.	Tariff item, sub-heading, heading or Chapter	Description of supply of Goods	Supplier of goods	Recipient of supply
3A	33012400, 33012510, 33012520, 33012530, 33012540	Following essential oils other than those of citrus fruit namely: – a) Of peppermint (Menthapiperita); b) Of other mints : Spearmint oil (exmenthaspicata), Water mint-oil (exmentha aquatic), Horsemint oil (exmenthasylvestries), Bergament oil (ex-mentha citrate).	Any Unregistered Person	Any Registered Person.

g. Fortified Rice Kernel (Premix) supply for ICDS or similar scheme duly approved by the Central Government or any State Government shall attract the concessional rate of tax of 5% (refer Notification No. 11/2017 – CT (Rate))