On October 19, 2023, the Ministry of Finance, Department of Revenue, Government of India, issued Notification No. 17/2023- Union Territory Tax (Rate). This notification brings about significant amendments in tax rates under the Union Territory Goods and Services Tax Act, 2017. The changes impact various categories, including items in Schedule I, Schedule III, and Schedule IV. In this article, we provide a detailed analysis of these amendments and their implications.
Detailed Analysis:
1. Schedule I – 2.5% Amendments:
- New Entry 92A: Notification 17/2023 introduces a new entry, 92A, which covers “Molasses.” This item now falls under the 2.5% tax bracket.
- New Entry 96A: Another addition, entry 96A, pertains to “Food preparation of millet flour, in powder form, containing at least 70% millets by weight, pre-packaged and labeled.” This food product is now subject to a 2.5% tax rate.
2. Schedule III – 9% Amendments:
- Amendment to Entry 13: Entry 13 in Schedule III undergoes a modification. The description of this entry is updated to include “food preparation of millet flour, in powder form, containing at least 70% millets by weight, pre-packaged and labeled.” This item is now taxed at 9%.
- New Entry 25A: A new entry, 25A, is introduced, covering “Spirits for industrial use.” These spirits are subject to a 9% tax rate.
3. Schedule IV – 14% Amendment:
- Omission of Entry 1: Notification 17/2023 removes S. No. 1 and its associated entries in Schedule IV. This results in the omission of this entry from the 14% tax category.
Conclusion:
Notification No. 17/2023- Union Territory Tax (Rate) signifies a significant step in streamlining tax rates under the Union Territory Goods and Services Tax Act. These amendments touch upon various categories, providing clarity and uniformity in tax treatment.
The introduction of new entries in Schedule I and Schedule III, especially those concerning food preparations and industrial spirits, reflects the government’s focus on aligning tax rates with specific products and industries. This ensures that these items are appropriately categorized, promoting tax consistency.
Additionally, the removal of Entry 1 in Schedule IV simplifies the tax structure by eliminating this particular category from the 14% tax bracket.
It’s essential for businesses and individuals affected by these changes to stay informed and adapt their tax practices accordingly. Understanding the updated provisions is crucial to ensure compliance with the law and avoid potential tax-related issues.
In conclusion, Notification No. 17/2023- Union Territory Tax (Rate) showcases the government’s commitment to enhancing India’s tax system by bringing transparency, consistency, and clarity to the taxation of various goods and services. These changes are aimed at creating a more equitable and straightforward tax structure, ultimately benefitting taxpayers and the government alike.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
Notification No. 17/2023- Union Territory Tax (Rate)|Dated: 19th October, 2023
G.S.R.776(E).– In exercise of the powers conferred by sub-section (1) of section 7 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), notification No. 1/2017- Union Territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 710(E)., dated the 28thJune, 2017, namely:-
In the said notification, –
(A) in Schedule I – 2.5%, –
(i) after S. No. 92 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) |
| “92A. | 1703 | Molasses”; |
(ii) after S. No. 96 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
|
(1) |
(2) | (3) |
| “96A. | 1901 | Food preparation of millet flour, in powder form, containing at least 70% millets by weight, pre-packaged and labelled”; |
(B) in Schedule III – 9%,
(i) against S. No. 13, in column (3), for the words and figures “of heading 1905”, the words and figures “of heading 1905; food preparation of millet flour, in powder form, containing at least 70% millets by weight, pre-packaged and labelled ” shall be substituted;
(ii) after S. No. 25 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) |
| “25A. | 2207 10 | Spirits for industrial use”; |
| 12 |
(C) in Schedule IV – 14%, S. No. 1 and the entries relating thereto shall be omitted.
2. This notification shall come into force with effect from the 20th day of October, 2023.
[F. No. CBIC-190354/195/2023-TO(TRU-II)-CBEC]
Vikram Wanere
Under Secretary
Note: – The principal notification No. 1/2017- Union Territory Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 710(E)., dated the 28th June, 2017 and was last amended by notification No. 11/2023 -Union Territory Tax (Rate), dated the 29th September, 2023, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 713(E), dated the 29th September, 2023.
