Notification No. 16/2017 - Integrated Tax (Rate) Explained

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Notification No. 16/2017 - Integrated Tax (Rate): Seek to reduce the rate of Central Tax, Union Territory Tax, on fertilizers from 6% to 2.5% and Integrated Tax rate on fertilizers from 12% to 5%

GST: [TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.1/2017- Integrated Tax (Rate), dated the 28th June, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 666(E), dated the 28th June, 2017, namely:-

In the said notification,-

in Schedule I – 5%, after serial number 182 and the entries relating thereto, the following serial numbers and entries shall be inserted, namely:-

(1)	(2)	(3)
“182A	3102	Mineral or chemical fertilizers, nitrogenous, other than those which are clearly not to be used as fertilizers.
182B	3103	Mineral or chemical fertilizers, phosphatic, other than those which are clearly not to be used as fertilizers.
182C	3104	Mineral or chemical fertilisers, potassic, other than those which are clearly not to be used as fertilizers
182D	3105	Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg; other than those which are clearly not to be used as fertilizers”;

in Schedule II – 12%, serial numbers 66, 67, 68 and 69 and the entries relating thereto shall be omitted.

This notification shall come into force with effect from the 1st day of July, 2017.

(Mohit Tewari)
Under Secretary to the
Government of India

📚 Frequently Asked Questions (FAQs): Notification No. 16/2017 — Integrated Tax (Rate)

Q1: What is the GST rate on fertilizers?

Answer: The GST rate is 5%.
Earlier it was 12%, but reduced via Notification 16/2017. This applies to most fertilizers under HSN Chapter 31.

Q2: From when is 5% GST applicable?

Answer: From 1 July 2017.
This is the date when GST was implemented along with the revised rate structure.

Q3: Does it apply to all fertilizers?

Answer: Mostly yes, but not all.
Only those clearly meant for use as fertilizers qualify. Chemicals used for other purposes may not.

Q4: What are the HSN codes covered?

Answer: HSN 3102 to 3105.
These include nitrogenous, phosphatic, potassic, and mixed fertilizers.

Q5: What happens if wrong GST is charged?

Answer: It can lead to penalties and tax demands.
Businesses may also lose ITC or face notices from the department.

Q6: Is ITC available on fertilizers?

Answer: Yes, ITC is allowed.
But proper documentation and compliance are required to claim it.

Q7: Does this apply to interstate supply?

Answer: Yes.
This notification specifically relates to IGST, which applies to interstate transactions.

Q8: Is there any exemption on fertilizers?

Answer: No full exemption.
Fertilizers are taxed at a concessional rate of 5%, not zero.

Q9: Can dealers charge different GST rates?

Answer: No.
GST rates are fixed by law. Any deviation is non-compliance.

Q10: What is the role of GST Council here?

Answer: It recommends tax rates.
The government issues notifications based on these recommendations.

Q11: Are organic fertilizers also covered?

Answer: Depends on classification.
If they fall under Chapter 31, then 5% applies.

Q12: How to check correct GST rate?

Answer: Refer official notifications.
You should verify HSN codes and consult GST rate schedules.

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