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F. No. CBIC-190354/21/2023-TO(TRU-II)-CBEC
Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)
*****
North Block, New Delhi
Date: 27th March 2023
Circular No. 191/03/2023 - GST: Clarification regarding GST rate and classification of ‘Rab’ based on the recommendation of the GST Council in its 49th meeting held on 18th February 2023 –reg
To,
The Principal Chief Commissioners/ Principal Directors General, The Chief Commissioners/ Directors General,
The Principal Commissioners/ Commissioners of Central Excise & Central Tax
Madam/ Sir,
Subject: Clarification regarding GST rate and classification of ‘Rab’ based on the recommendation of the GST Council in its 49th meeting held on 18th February 2023–reg.
Based on the recommendation of the GST council in its 49th meeting, held on 18th February 2023, with effect from the 1st of March 2023, 5% GST rate has been notified on Rab, when sold in pre- packaged and labelled, and Nil GST, when sold in other than pre- packaged and labelled.
2. Further, as per the recommendation of the GST Council in the above-said meeting, in view of the prevailing divergent interpretations and genuine doubts regarding the applicability of GST rate on Rab, the issue for past period is hereby regularized on “as is” basis.
3. Difficulty if any, in the implementation of this circular may be brought to the notice of the Board.
Yours faithfully,
(Amreeta Titus)
Deputy Secretary, TRU-I
📚 Frequently Asked Questions (FAQs): Circular No. 191/03/2023 - GST
Q1. What is Circular No. 191/03/2023-GST?
Answer:
Circular No. 191/03/2023-GST clarifies the GST rate and classification of 'Rab', based on the recommendations of the 49th GST Council Meeting held on 18 February 2023. The circular specifies the GST treatment of Rab depending on whether it is sold in pre-packaged and labelled form or otherwise. It also regularizes disputes relating to the past period on an "as is" basis.
Q2. What is the GST rate on Rab?
Answer:
With effect from 1 March 2023, Rab sold in pre-packaged and labelled form attracts 5% GST, whereas Rab sold in other than pre-packaged and labelled form attracts Nil GST.
In simple terms, the GST liability depends on the manner in which Rab is supplied. Packaging and labelling play an important role in determining the applicable GST rate.
Q3. From when is the revised GST rate applicable?
Answer:
The revised GST treatment applies from 1 March 2023.
Many businesses actually face confusion regarding the effective date of tax changes. The circular clearly mentions that the notified GST rates for Rab became effective from 1 March 2023, following the recommendations of the GST Council.
Q4. Is GST applicable when Rab is sold loose or without pre-packaging?
Answer:
No. Rab sold other than in pre-packaged and labelled form attracts Nil GST.
Let’s understand this with an example. If a local producer sells Rab in bulk or loose form without pre-packaging and labelling, the supply qualifies for Nil GST under the clarification issued by CBIC.
Q5. Why was this circular issued?
Answer:
The circular was issued because taxpayers and GST authorities had adopted different interpretations regarding the classification and GST rate applicable to Rab.
If you look at it practically, inconsistent tax treatment creates unnecessary litigation. The CBIC therefore issued this clarification to bring uniformity and provide certainty for manufacturers, traders, and tax officers across the country.
Q6. What does "regularized on an as is basis" mean for the past period?
Answer:
The circular states that, considering the genuine doubts and divergent interpretations regarding the GST treatment of Rab, the issue relating to the past period has been regularized on an "as is" basis.
This means past transactions will generally not be disturbed solely because of this clarification. It provides relief to taxpayers by reducing avoidable disputes arising from differing interpretations before the clarification was issued.
Q7. Does this circular allow taxpayers to claim GST refunds for the past period?
Answer:
No. The circular only states that the past period has been regularized on an "as is" basis.
It does not provide any specific mechanism for claiming refunds or revising earlier tax payments. Businesses should therefore continue to follow the clarification prospectively while treating past transactions in accordance with the regularization provided by the Government.
Q8. Who is affected by this clarification?
Answer:
The clarification is relevant for manufacturers, wholesalers, traders, retailers, food processors, agricultural businesses, and distributors dealing in Rab.
Businesses supplying Rab should review whether their products are sold in pre-packaged and labelled form because that determines whether the applicable GST rate is 5% or Nil.
Q9. Does this circular amend the GST law?
Answer:
No. Circular No. 191/03/2023-GST is clarificatory in nature.
It explains the GST treatment of Rab following the recommendations of the 49th GST Council Meeting. The circular helps ensure consistent implementation of the notified GST rate but does not independently amend the CGST Act.
Q10. What should businesses do after this clarification?
Answer:
Businesses dealing in Rab should review their packaging practices, invoice descriptions, HSN classifications, and GST rates applied from 1 March 2023 onward. Proper identification of whether the product is pre-packaged and labelled is essential for charging the correct GST.
This simple review can help prevent disputes during GST audits.
Related Resource:
GST Compliance: https://finodha.in/gst-compliance/
Download PDF: Circular No. 191/03/2023 - GST
More Information: https://taxinformation.cbic.gov.in/
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