The Ministry of Finance, Department of Revenue, has issued Circular No. 229/23/2024-GST dated 15th July 2024, providing crucial clarifications on GST rates and classification of goods. These clarifications are based on the recommendations from the 53rd GST Council meeting held on 22nd June 2024. This article will discuss the specifics of these clarifications, which include GST rates on solar cookers, fire water sprinklers, parts of poultry-keeping machinery, pre-packaged agricultural produce, and supplies to or by government agencies. Detailed Analysis is as follows;-
1. GST Rate on Solar Cookers The circular addresses the classification and applicable GST rate on solar cookers that utilize dual energy sources (solar energy and grid electricity). It clarifies that these cookers fall under heading 8516 and attract a GST rate of 12% as per Sl. No. 201A of Schedule II of notification No. 1/2017-Central Tax (Rate) dated 28th June 2017.
2. GST Rate on Fire Water Sprinklers The circular clarifies that fire water sprinklers are included in the existing entry for sprinklers at a 12% GST rate. This is covered under Sl. No. 195B of Schedule II of notification No. 1/2017-Central Tax (Rate) dated 28th June 2017. Additionally, any issues related to this classification for past periods are regularized on an “as is where is” basis.
3. GST Rate on Parts of Poultry-Keeping Machinery The circular specifies that parts of poultry-keeping machinery are classifiable under tariff item 8436 91 00 and attract a 12% GST rate according to Sl. No. 199 of Schedule II of notification No. 1/2017-Central Tax (Rate) dated 28th June 2017. To ensure clarity, this entry has been amended via notification No. 2/2024-Central Tax (Rate) dated 12th July 2024 to explicitly include parts of poultry-keeping machinery. Issues for the past period are also regularized on an “as is where is” basis.
4. Scope of ‘Pre-Packaged and Labelled’ for Agricultural Farm Produce The circular clarifies the definition of ‘pre-packaged and labelled’ for GST purposes, especially in light of amendments to the Legal Metrology (Packaged Commodities) Rules, 2011. The definition has been amended to exclude agricultural produce packaged in quantities exceeding 25 kg or 25 liters from attracting a 5% GST levy. This change is reflected in notifications No. 2/2024-Central Tax (Rate) and No. 3/2024-Central Tax (Rate) both dated 12th July 2024. Issues for the past period are regularized on an “as is where is” basis.
5. Supplies to or by Government Agencies The circular provides clarification on GST rates applicable to supplies of pulses and cereals made to or by government agencies engaged in procurement and distribution under government-approved programs. It regularizes issues from 01.07.2017 to 17.07.2022 on an “as is where is” basis, provided that a certificate from a government officer and reversal of input tax credit (if availed) are submitted within 180 days of this circular’s issuance.
6. Conclusion: Circular No. 229/23/2024-GST provides vital clarifications to ensure uniformity in the application of GST rates on specific goods, addressing various industry representations. The detailed explanations for solar cookers, fire water sprinklers, parts of poultry-keeping machinery, pre-packaged agricultural produce, and supplies involving government agencies reflect the GST Council’s efforts to resolve ambiguities and streamline tax compliance.
F.No. 190354/94/2024-TO(TRU-II)-CBEC
Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)
North Block, New Delhi
***
Circular No. 229/23 /2024-GST | Dated: 15th July, 2024
To
The Principal Chief Commissioners/ Principal Directors General,
The Chief Commissioners/ Directors General,
The Principal Commissioners/ Commissioners of Central Excise & Central Tax
Subject: Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 53rd meeting held on 22nd June, 2024, at New Delhi –reg.
Madam/ Sir,
Based on the recommendations of the GST Council in its 53 rd meeting held on 22nd June, 2024, at New Delhi, in exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017, clarifications on the following issues are being issued through this Circular as under:
2. Clarification regarding GST rate on Solar Cookers:
2.1 Representations have been received seeking clarification regarding appropriate classification and applicable GST rate on supply of solar cookers that work on dual energy source.
2.2 On the recommendations of GST Council, it is hereby clarified that solar cookers that work on dual energy of solar energy and grid electricity are appropriately classifiable under heading 8516 and already attract a GST rate of 12% vide Sl. No. 201A of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28th June, 2017.
3. Clarification regarding GST rate on Fire Water Sprinklers:
3.1 Representations have been received seeking clarification as to whether the existing entry covering sprinkles at 12% GST rate also cover Fire Water Sprinklers.
3.2 On the recommendations of the Council, it is hereby clarified that all types of sprinklers, including fire water sprinklers attract GST at the rate of 12% vide Sl. No. 195 B of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28th June, 2017.
3.3 Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine doubts, the issues for the past period are regularized on “as is where is basis”.
4. Clarification regarding GST rate on parts of Poultry-keeping machinery:
4.1 Representations have been received seeking clarification regarding appropriate classification and applicable GST rate on supply of ‘parts’ of Poultry-keeping machinery.
4.2 Parts of Poultry-keeping machinery are classifiable under tariff item 8436 91 00 and attract GST at the rate of 12% vide Sl. No. 199 of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28th June, 20177. On the recommendations of the Council, to bring clarity on the issue, the relevant entry at Sl. No. 199 of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28th June, 2017 , has been amended vide notification No. 2/2024-Central Tax (Rate), dated the 12th July, 2024 to specifically include ‘parts’ of Poultry-keeping machinery.
4.3 Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine doubts, the issues for the past period are regularized on “as is where is basis”.
5. Clarification regarding the scope of expression ‘pre-packaged and labelled’ for supply of agricultural farm produce:
5.1 Representations have been received seeking clarification regarding the scope of expression `pre-packaged and labelled’ for the purposes of levy of GST on supply of agricultural farm produce in view of amendment made in Legal Metrology (Packaged Commodities) Rules, 2011.
5.2 On the basis of the recommendation of the GST Council, the definition of ‘pre-packaged and labelled’ in notification No. 1/2017-Central Tax (Rate) and notification No. 2/2017-Central Tax (Rate), both dated the 28th June, 2017, has been amended vide notification No. 2/2024-Central Tax (Rate) dated 12th July 2024 and notification No. 3/2024-Central Tax (Rate) dated 12th July, 2024, respectively, to exclude the supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilogram or 25 litre from the scope of ‘pre-packaged and labelled’. Consequently, supply of agricultural farm produce in package (s) containing quantity of more than 25 kilogram or 25 litre will not attract GST levy of 5%.
5.3 Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine doubts, the issues for the past period are hereby regularized on “as is where is” basis.
6. Clarification regarding supplies of Roods made to or by agency engaged by Government
6.1 Prior to 17th July, 2022, supplies of pulses and cereals attracted GST at rate of 5%, wherein the said goods were put up in a unit container and bearing a registered brand name and/or bearing a brand name on which an actionable claim or enforceable right in a court of law is available.
6.2 On the basis of the recommendation of the GST Council, in view of the genuine interpretational issues, the issues for the past period from 01.07.2017 up to 17.07.2022 are hereby regularized on “as is where is” basis for supplies made to or by any agency engaged by Union Government or State Government/Union Territory for procurement and sale of such goods under any programme/scheme duly approved by the Central Government or any State Government intended to distribute such goods at free of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society subject to following conditions, namely:‑
a. the concerned supplier furnishes a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory concerned recommending that supplies have been made to or by an agency engaged by Union Government or State Government/Union Territory for procurement and sale of such goods under any programme/scheme duly approved by the Central Government or any State Government intended to distribute such goods at free of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society, within a period of 180 days from the date of issuance of this Circular to the jurisdictional commissioner of the Central Tax or jurisdictional commissioner of the State Tax, or jurisdictional officer of the Union Territory Tax, as the case maybe; and
b. Input Tax Credit shall not be allowed on such inputs and, if availed on such inputs, it shall be reversed within a period of 180 days from the date of issuance of this Circular, if the supplier intends to take the benefit under the proposed regularisation.
7. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.
Yours faithfully,
(Limatula Yaden)
Joint Secretary (TRU)
Tel: 011 -2309 2687
