Clarification regarding GST rates and classification of certain goods based on the recommendations of the GST Council in its 50th meeting held on 11th July, 2023

Circular No.: 200/12/2023-GST
Date of Circular: 1st August 2023
Relevant Sections and Rules:

• CGST Act, 2017: Sections 9 and 168(1)
• Notifications:
  • Notification No. 1/2017-CT(R) dated 28.06.2017
  • Notification No. 43/2017-CT(R) dated 14.11.2017
  • Notification No. 2/2017-CT(R) dated 28.06.2017

Summary of Clarifications Provided:

1. GST on Un-fried or Un-cooked Snack Pellets (Extruded):
   Effective from 27.07.2023, un-fried or un-cooked snack pellets (e.g., extruded fryums) falling under CTH 1905 attract 5% GST under S. No. 99B of Schedule I of Notification No. 1/2017-CT(R). These were earlier classifiable under Tariff 1905 90 30 at 18%. The rate for past periods is regularized on “as is” basis due to interpretational doubts.
2. GST on Fish Soluble Paste:
   GST on Fish Soluble Paste falling under CTH 2309 is reduced from 18% to 5%, effective 27.07.2023 under S. No. 108A of Schedule I. Past disputes are regularized “as is.”
3. Desiccated Coconut:
   Due to historical ambiguity on GST rate for desiccated coconut under CTH 0801, the issue for the period 01.07.2017 to 27.07.2017 is regularized on “as is” basis.
4. Biomass Briquettes:
   GST applicability on biomass briquettes (any chapter) for the period 01.07.2017 to 12.10.2017 is regularized on “as is” basis, acknowledging prior ambiguity.
5. Supply of Raw Cotton by Agriculturists to Cooperatives:
   Such supply to cooperatives is taxable at 5% on reverse charge basis as per Notification No. 43/2017-CT(R). Due to genuine doubt, the past period before this clarification is regularized “as is.”
6. GST on Imitation Zari Thread/Yarn:
   Imitation zari threads (e.g., kasab), under HSN 5605, now attract 5% GST effective 27.07.2023 (reduced from 12%). Trade confusion is addressed and past compliance is regularized.
7. Plates and Cups Made from Areca Leaves:
   For the period prior to 01.10.2019, ambiguity in classification and rate is regularized on “as is” basis.
8. Trauma, Spine, Arthroplasty Implants under HSN 9021:
   Clarified to attract 5% GST since 18.07.2022. Due to historical duality in rates (5% and 12%), past periods are regularized. However, no refund shall be allowed for GST paid at the higher 12% rate.
9. General Clarification:
   For all the above goods, if GST has already been paid at a higher rate, no refund will be granted.

Source: Circular No.: 200/12/2023-GST