Notification No. 18/2019 - Central Tax (Rate) Explained

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Notification No. 18/2019 - Central Tax (Rate): Seeks to amend notification No 2/2019- Central Tax (Rate) dated 7.3.2019 so as to exclude manufacturers of aerated waters from the purview of composition scheme.

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

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.02/2019-Central Tax (Rate), dated the 7^th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 189(E), dated the 7th March, 2019, namely:-

In the said notification, in the Annexure, after Sl. No. 2 and the entries thereto, the following Sl. No. and entries shall be inserted, namely: -

“2A.

2202 10 10

Aerated Water”.

2. This notification shall come into force on the 1^st day of October, 2019.

(Gunjan Kumar Verma)
Under Secretary to the
Government of India

Note: - The principal notification No.2/2019-Central Tax (Rate), dated the 7^th March, 2019 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 189(E), dated the 7^th March, 2019 and last amended by Notification No. 9/2019-Central Tax(Rate) dated 29^th March, 2019 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 268(E), dated the 29^th March, 2019.

📚 Frequently Asked Questions (FAQs): Notification No. 18/2019 - Central Tax (Rate)

Q1: What is Notification No. 18/2019 – Central Tax (Rate)?

Answer:
It amends Notification No. 02/2019 – Central Tax (Rate) to exclude manufacturers of aerated water (HSN 2202 10 10) from the GST Composition Scheme, effective 1 October 2019.

Q2: From which date is the exclusion applicable?

Answer:
The exclusion applies from 1 October 2019.

Q3: What exactly is “aerated water” for GST purposes?

Answer:
Aerated water refers to carbonated beverages falling under HSN 2202 10 10, typically containing added carbon dioxide and flavours.

Q4: Can an aerated water manufacturer opt for the Composition Scheme now?

Answer:
No ❌. From 1 October 2019, manufacturers of aerated water are not eligible for the Composition Scheme.

Q5: What if an aerated water manufacturer was already under composition?

Answer:
They must exit the Composition Scheme and shift to the regular GST regime from the effective date, following prescribed transition procedures.
👉 Need help with transition?
🔗 https://finodha.in/gst-compliance/

Q6: Why were aerated water manufacturers excluded?

Answer:
Aerated beverages are typically:
High-turnover, branded products
Subject to higher GST rates
Not aligned with the simplified compliance intent of the Composition Scheme

Q7: Does this exclusion apply to traders of aerated water?

Answer:
The notification specifically targets manufacturers. Traders must evaluate eligibility based on separate composition conditions applicable to traders.

Q8: What GST rate applies to aerated water under the regular scheme?

Answer:
Aerated waters generally attract 28% GST plus Compensation Cess, making composition (low flat tax) unsuitable.

Q9: Can you explain with a real-life example?

Answer:
📌 Example:
A small bottling unit manufacturing carbonated soft drinks opted for composition in FY 2019-20. From 1 Oct 2019, it must shift to regular GST, charge full GST on invoices, and file regular returns.

Q10: Is Input Tax Credit (ITC) available after shifting to regular GST?

Answer:
Yes ✅. Once under the regular scheme, manufacturers can claim ITC on eligible inputs and input services, subject to Section 16 & 17 conditions.

Q11: What compliance changes are required after exit from composition?

Answer:
Businesses must:
Start issuing tax invoices
Charge applicable GST
File GSTR-1 and GSTR-3B regularly
👉 File error-free returns with Finodha GST Return Filing:
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Q12: Does this change affect GST registration?

Answer:
If already registered, no new registration is required. However, status changes from composition to regular must be updated.
👉 Need registration support?
🔗 https://finodha.in/online-gst-registration/

Q13: Does this exclusion apply across India?

Answer:
Yes ✅. Corresponding SGST notifications ensure nationwide applicability.

Q14: Are other beverage manufacturers also excluded?

Answer:
No. This notification specifically names aerated water. Other beverages must be checked against composition eligibility separately.

Q15: Who should carefully review Notification No. 18/2019?

Answer:
Aerated beverage manufacturers
Bottling plants
Contract manufacturers for soft drink brands
GST consultants advising FMCG clients
👉 Get clarity from Finodha GST Experts:
🔗 https://finodha.in/gst-compliance/