The 53rd Meeting of the GST Council, held on June 22, 2024, in New Delhi, brought forth several recommendations concerning the adjustment of GST rates on various goods and services. This meeting led to significant changes of rates of Goods that affect products such as milk cans, cartons, boxes, cases of paper, and solar cookers etc and various services.
New Notifications Dated 12 July 2024 issued to notify the changes in Rates of Goods & Services w.e.f 15 July 2024.
You can also refer Press Release of 53rd GST council meeting for better understanding
Below are Link to Download Notifications:
| Number | Date | Subject | Download |
|---|---|---|---|
| 04/2024-Central Tax (Rate) | 12-Jul-2024 | Seeks to amend Notification No 12/2017- Central Tax (Rate) dated 28.06.2017. | English हिन्दी |
| 03/2024-Central Tax (Rate) | 12-Jul-2024 | Seeks to amend notification No. 2/2017- Central Tax (Rate) | English हिन्दी |
| 02/2024-Central Tax (Rate) | 12-Jul-2024 | Seeks to amend notification No. 1/2017- Central Tax (Rate) | English हिन्दी |
Click to Read Other GST Changes notifications dated 10 July 2024 also
Notification No. 1/2024 (Compensation Cess (Rate))
Following this recommendation, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 01/2024 – Compensation Cess (Rate) on July 12, 2024.
This notification, effective from July 15, 2024, exempts the supply of goods falling under Heading 2202 by a Unit Run Canteen to authorized customers from the whole of the GST Compensation Cess levied under Section 8 of the GST (Compensation to States) Act.
The details of the notification are as follows:
Explanation:
- In this Notification, “tariff item,” “heading,” “sub-heading,” and “Chapter” shall mean respectively a tariff item, heading, sub-heading, and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
- The rules for interpreting the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule, shall, as far as may be, apply to the interpretation of this notification.
Effect of the Notification
The CBIC’s notification exempts the Compensation cess on the supply of aerated beverages and energy drinks to authorized customers by Unit Run Canteens, effective from July 15, 2024. The exemption applies to goods under the following heading:
| S. No. | Chapter / Heading / Sub-heading / Tariff item | Description of Goods |
|---|---|---|
| 12B | 2202 | Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice |
This exemption aims to provide cost benefits to the personnel who purchase these beverages from Unit Run Canteens, thus supporting the welfare of defense personnel and their families.
Notification No.2/2024 (Central Tax (Rate))
Following these recommendations, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 02/2024 – Central Tax (Rate) on July 12, 2024.
This notification, effective from July 15, 2024, amends the previous Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017, and introduces new serial numbers and entries for the following goods:
| S. No. | Chapter / Heading / Sub-heading / Tariff item | Description of Goods | Rate Before | Rate After |
|---|---|---|---|---|
| 121A | 4819 10, 4819 20 | Cartons, boxes, and cases of, – (a) corrugated paper or paper board; or (b) non-corrugated paper or paper board | 9% | 6% |
| 180A | 7310, 7323, 7612, or 7615 | Milk cans made of Iron, Steel, or Aluminium | 9% | 6% |
| 183A | 7321 or 8516 | Solar cookers | 9% | 6% |
| 199 | 8436 | Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders; parts thereof | 6% | – |
| 153A | 4819 (except 4819 10, 4819 20) | All Goods (other than Cartons, boxes and cases of, – (a) corrugated paper or paper board; or (b) non-corrugated paper or paper board) | – | 9% |
| 224 | 7310 | Tanks, casks, drums, cans, boxes and similar containers, for any material (other than compressed or liquefied gas), of iron or steel, of a capacity not exceeding 300 l, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment; other than Milk cans made of Iron, or Steel | 9% | – |
| 235 | 7321 | Stoves, ranges, grates, cookers (including those with subsidiary boilers for central heating), barbecues, braziers, gas-rings, plate warmers and similar non-electric domestic appliances, and parts thereof, of iron or steel [other than Kerosene burners, kerosene stoves and wood burning stoves of iron or steel, wood burning stoves of iron or steel, and solar cookers] | 9% | – |
| 273 | 7612 | Aluminium casks, drums, cans, boxes, etc.; other than Milk cans made of Aluminium | 9% | – |
| 275A | 7615 | All goods [other than table, kitchen or other household articles, of aluminium; Utensils; Milk cans made of Aluminium | 9% | – |
| 378A | 8516 | Electric instantaneous or storage water heaters and immersion heaters; electric space heating apparatus and soil heating apparatus; electro thermic hair-dressing apparatus (for example, hair dryers, hair curlers, curling tong heaters) and hand dryers; electric smoothing irons; other electro-thermic appliances of a kind used for domestic purposes [other than solar cookers]; electric heating resistors, other than those of heading 8545 | 9% | – |
Effect of the Notification
The changes introduced by the CBIC have significantly impacted the GST rates for various goods:
- Milk Cans: The GST rate for milk cans made from steel, iron, and aluminum has been reduced from 9% to 6%.
- Cartons, Boxes, and Cases: The GST rate for cartons, boxes, and cases made of both corrugated and non-corrugated paper or paperboard has been reduced from 9% to 6%.
- Solar Cookers: The GST rate for all solar cookers, whether single or dual energy source, has been set at 6%.
Notification No.3/2024 (Central Tax (Rate))
The 47th Meeting of the GST Council, held on June 29, 2022, in Chandigarh under the chairpersonship of the Hon’ble Union Finance Minister, Ms. Nirmala Sitharaman, brought forth crucial recommendations to redefine the criteria for GST applicability on goods. It was recommended to replace the exclusion condition of being “branded” with the condition of being “pre-packaged and labelled” in accordance with the Legal Metrology Act & Rules to specify items subject to taxation.
Consequently, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 6/2022-Central Tax (Rate) dated July 13, 2022. This notification substituted the “brand name” definition with the “pre-packaged and labelled” definition by amending Notification No. 1/2017-Central Tax (Rate), dated June 28, 2017 (the CGST Rate Notification), making GST applicable to food items when “pre-packaged and labelled”.
Notification Details
The CBIC, vide Notification No. 02/2024 – Central Tax (Rate) dated July 12, 2024, further amends the CGST Rate Notification. The amendment, effective from July 15, 2024, includes the insertion of the following proviso after Schedule VII, in the Explanation, clause (ii):
Explanation – For the purposes of this notification:
(i) …
(ii) The expression “pre-packaged and labelled” means a “pre-packaged commodity” as defined in clause (l) of section 2 of the Legal Metrology Act, 2009 (1 of 2010) where the package in which the commodity is pre-packed or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder.
Proviso Insertion:
“Provided that notwithstanding anything contained in the Legal Metrology Act, 2009 (1 of 2010) and the rules made thereunder, as amended from time to time, the supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilograms or 25 liters shall not be considered as a supply made within the scope of expression ‘pre-packaged and labelled’.”
Similarly, the CBIC issued Notification No. 03/2024 – Central Tax (Rate) dated July 12, 2024, amending Notification No. 2/2017-Central Tax (Rate), dated June 28, 2017. The same proviso has been inserted after the Schedule, in the Explanation, clause (ii).
Effect of the Notification
The CBIC’s recent amendments have significantly impacted the agricultural sector. Prior to these amendments, GST was applicable to food items defined as “pre-packaged and labelled” under the Legal Metrology Act, 2009. The new provisions exempt agricultural farm produce supplied in packages exceeding 25 kilograms or 25 liters from being classified as “pre-packaged and labelled” and, thus, exempt from GST.
This change is expected to relieve the tax burden on the agricultural sector, promoting ease of business for farmers and suppliers dealing in large quantities of produce. The notifications ensure uniformity and clarity in GST application, aligning with the Legal Metrology Act while addressing sector-specific needs.
Notification No.4/2024 (Central Tax (Rate))
The amendments to the GST rates, as recommended by the 53rd GST Council Meeting and notified by the CBIC, reflect a move towards rationalizing the tax structure on essential goods and services.
Similar notifications have also been issued under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”), ensuring uniformity in the application of these rates across the country.
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