The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 235/29/2024-GST dated October 11, 2024, issued vital clarifications on the Goods and Services Tax (GST) rates and classification of certain goods. These clarifications are based on the recommendations of the GST Council during its 54th meeting held on September 9, 2024, in New Delhi. The clarifications are intended to ensure uniformity and remove any ambiguities in the implementation of GST laws concerning specific goods.
Click here to Read Change in Rate Notification for below items
Below are the major clarifications:
1. GST Rate on Extruded/Expanded Savoury Food Products
Issue: There was confusion regarding the classification and GST rate applicable to savoury or salted extruded snack pellets.
Clarification:
- The GST Council has recommended a reduced GST rate of 12% on extruded or expanded savoury food products (excluding un-fried or un-cooked snack pellets) falling under HS 1905 90 30, effective from October 10, 2024.
- These products will now attract the same GST rate as pre-packaged and labelled namkeens, bhujia, and similar edible preparations, which fall under HS 2106 90.
- However, un-fried or un-cooked snack pellets (manufactured through extrusion) will continue to attract a 5% GST rate.
Past Period: The reduced 12% rate will apply prospectively, while GST at 18% will be payable for the past period.
2. GST Rate on Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways
Issue: Confusion regarding whether RMPU air conditioners for railways should be classified under HS 8415 (Air Conditioning Machines) or HS 8607 (Parts of Railways).
Clarification:
- Roof Mounted Package Unit (RMPU) Air Conditioning Machines for railways are classified under HS 8415, which attracts a GST rate of 28%.
- Chapter 86, which includes parts of railways or tramway locomotives, does not cover air conditioning machines, as per Section Note 2 of Section XVII of the Customs Tariff Act.
3. GST Rate on Car and Motorcycle Seats
Issue: Clarification was sought regarding the classification and GST rates applicable to seats for four-wheeled cars and two-wheelers (motorcycles).
Clarification:
- Two-Wheeler Seats: Seats for motorcycles are classifiable under HS 8714, which includes parts and accessories for motorcycles. These attract a 28% GST rate.
- Car Seats: Seats for cars are classified under HS 9401 (Seats for motor vehicles) and were previously subject to an 18% GST rate.
- To align with the GST rate on motorcycle seats, car seats will now also attract a GST rate of 28%, effective from October 10, 2024.
Past Period: The 28% rate on car seats applies prospectively; before this, car seats attracted 18% GST.
4. Field Instructions
The circular instructs all field formations to implement these changes as recommended and ensure that the GST rate and classification changes are uniformly applied.
Visit www.cagurujiclasses.com for practical courses
