GST Rates & Classification of Goods – Recent Clarifications

CBIC has issued two detailed Circulars Nos. 163 and 164 dated 06.10.2021 clarifying various issues on taxability, GST rate, classification and exemptions on goods and services based on recent notifications / changes as per the recommendations of GST Council. Such clarifications would help the taxpayers, professionals and the tax officers in understanding and complying with the law.

Following is the Gist of Circular No. 163/20/2021-GST dated 06.10.2021 in relation to clarifications on levy of GST on supply of specified goods.

GST on fresh and dried fruits and nuts

  • Fresh nuts (almond, walnut, hazelnut, pistachio etc) falling under heading 0801 and 0802 are exempt from GST, while dried nuts under these headings attract GST at the rate of 5%/ 12%.
  • In terms of Note 3 to Chapter 8, dried fruits, even if partially re-hydrated, or subject to preservation say by moderate heat treatment, retain the character of dried fruits or dried nuts.
  • Exemption from GST to fresh fruits and nuts covers only such products which are not frozen or dried in any manner as stated above or otherwise processed.
  • Supply of dried fruits and nuts, falling under heading 0801 and 0802 attract GST at the rate of 5%/12% as specified in the respective rate Schedules.

GST on Tamarind Seeds

  • GST rate on seeds, falling under heading 1209, meant for any use other than sowing is 5% (S. No. 71A of schedule I of notification No. 1/2017- Central Tax (Rate) dated 28.06.2017) and Nil rate would apply only to seeds for this heading if used for sowing purposes (S. No. 86 of schedule of notification No. 2/2017- Central Tax (Rate) dated 28.06.2017).
  • Hence, with effect from 1.10.2021, tamarind and other seeds falling under heading 1209, (i.e. including tamarind seeds), if not supplied as seed for sowing, would attract GST at the rate of 5%.

GST rate on Copra

  • As per Explanatory Notes to HS (2017 edition) to heading 1203, Copra is dried flesh of coconut generally used for the extraction of coconut oil. Coconut kernel turns into copra, when it separates from the shell skin, while still being inside the shell. The whole unbroken kernel could be taken out of shell only when it converts to copra. Once taken out of shell, copra could be supplied either whole or broken.
  • As per the Explanatory Notes to HSN, the heading 0801 covers coconut fresh or dried but excludes Copra. Thus, exemption available to Coconut, fresh or dried, whether or not shelled or peeled, vide entry at S. No. 47 of notification No. 2/2017- Central Tax (Rate) dated 28.06.2017, is not available to Copra.
  • Copra shall be classified under heading 1203, attracts GST rate of 5% vide entry at S. No. 66 of Schedule I of notification No. 1/2017- Central Tax (Rate) dated 28.06.2017, irrespective of use…Read more>>