Circular No. 235/29/2024-GST: Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 54th meeting held on 9 th September 2024 at New Delhi

by Shakshi Bharti | Nov 14, 2024 | GST, 2024 Circulars, Circulars, Circulars CGST 2024 | 0 comments

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Important Keyword: Section 168 (1) CGST Act 2017, Notification 1/2017-Central Tax (Rate), Circular No. 235/29/2024-GST, F. No. CBIC-190354/149/2024-TO(TRU-II)-CBEC.

F. No. CBIC-190354/149/2024-TO(TRU-II)-CBEC
Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)

North Block, New Delhi Dated the 11^th October 2024

Circular No. 235/29/2024-GST

Based on the recommendations of the GST Council in its 54^th meeting held on 9^th September, 2024, at New Delhi, in exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017, the Board hereby clarifies the following issues through this circular for the purpose of uniformity in their implementation:

1. Clarification regarding GST rate on Extruded/Expanded Savoury food products:

Representations were received seeking clarification regarding appropriate classification and whether savoury or salted extruded snack pellets are classifiable under HS 2106 as Namkeens due to disputes in the field. Based on the recommendations of Goods and Services Tax Council, with effect from 10.10.2024, extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion), falling under HS 1905 90 30 attract Goods and Services Tax at the rate of 12% vide entry 32C of Schedule II of notification 1/2017-Central Tax (Rate) dated the 28^th June, 2017 at par with namkeens, bhujia, mixture, chabena (pre-packaged and labelled) and similar edible preparations in ready for consumption form which are classifiable under HS 2106 90 of entry 46 of Schedule II of Notification 1/2017-Central Tax(Rate) dated the 28th June, 2017. The GST rate of 5% continue on un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion.
However, it is clarified that the reduced Goods and Services Tax rate of 12% on extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion) falling under HS 1905 90 30 shall apply prospectively from the date of effect of the said notification. For the past period, 18% GST shall be payable.

2. Clarification regarding GST rate on Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways:

Representations have been received regarding classification of Roof mounted air conditioners for Railways as to whether these goods are to be classified under HS 8415 with 28% GST rate or HS 8607 with 18% Goods and Services Tax.

In this regard Goods falling under heading 8415 (including air conditioning machines) attract a Goods and Services Tax rate of 28% vide S. No. 119 of Schedule IV of notification No. 01/2017-CT (Rate) dated 28.06.2017 (as amended). The goods falling under heading 8607 (including parts of railways or tramway locomotives) attract a Goods and Services Tax rate of 18% vide S. No. 398G of Schedule III of notification No. 01/2017-CT (Rate) dated 28.06.2017 (as amended). Machines and apparatus of heading 8415, which include Air conditioning machines, are excluded from the ambit of ‘parts’ covered under heading 8607 as per Section note 2 of Section XVII of Customs Tariff Act, 1975. From a conjoint reading of Note 2 and Note 3 of the Section notes for the Section XVII, it is clear that goods of heading 8401 to 8479 (including 8415 – Air Conditioning Machines) are excluded from the ambit of ‘parts’ covered under Chapter 86.

Although there is no ambiguity in the classification, to make it explicitly clear, it is clarified that the Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways are classified under HS 8415.

3. Clarification regarding GST rate on Car and Motor cycle seats:

Representations were received seeking clarification regarding classification of seats meant for four wheeled cars and two-wheelers and the consequent GST rate on seats meant for four wheeled cars and two-wheelers.

With regards to seats for two wheelers, it is pertinent to note that the Explanatory Note for HS 9401 has specifically excluded items under HS 8714 (includes parts and accessories of two wheelers). The explanatory note for HS 8714 has a list of inclusions, which has mention of Saddles (seats). Thus, for two wheelers (HS 8711), the seats would be classifiable under HS 8714 attracting GST rate of 28% vide S. No. 174 of Schedule IV of notification No. 1/2017-Central Tax (Rate) dated 28^th June, 2017 (as amended).

As regards seats for 4 wheeled vehicles, HS 9401 covers ‘Seats, whether or not convertible into beds and parts thereof’ (Tariff Item 9401 20 00 specifically covers seats of a kind used for motor vehicle). The Explanatory Note for this heading has also mentioned that seats for vehicles are covered under the ambit of HS 9401. Further, the Explanatory Notes to Chapter 94 have a list of exclusions that are not to be classified under the said Chapter. This list of exclusions does not mention seats meant for vehicles. Thus, it is seen that car seat would fall under HS 9401.

Thus, the seat assembly for 4 wheelers are classifiable under HS 9401 while seats for 2-wheelers are classifiable under HS 8714. There is no ambiguity in the GST rates on the said goods – car seats which are classifiable under 9401 attract GST @ 18 % vide S. No. 435A of Schedule III of notification No. 1/2017-Central Tax (Rate) dated 28th June, 2017 (as amended) and seats meant for two wheelers are classifiable under HS 8714 which attract a GST rate of 28%.

In order to bring parity with seats of motorcycles (classified under HS 8714) which already attract a GST rate of 28%, based on the recommendation of the Council, with effect from 10.10.2024 vide S. No. 210A of Schedule IV of notification No. 1/2017-Central Tax (Rate) dated 28th June, 2017 (as amended), car seats classifiable under HS 9401 attract GST at the rate of 28%. It is clarified that the 28% rate on car seats classifiable under HS 9401 is applicable prospectively, that is, from the date of effect of the said notification.