Notification No. 26/2019 - Integrated Tax (Rate) Explained

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Notification No. 26/2019 - Integrated Tax (Rate): Seeks to further amend notification No. 01/2017-Integrated Tax (Rate), to change the rate of GST on goods as per recommendations of the GST Council in its 38th Meeting.

GST: [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 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) read with sub-section (5) of section 15 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further 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 II - 12%, serial numbers 80AA and 171A and the entries relating thereto shall be omitted;

in Schedule III - 18%, after serial number 163A and the entries relating thereto, the following serial numbers and entries shall be inserted, namely: -

“163B	3923 or 6305	Woven and non-woven bags and sacks of polyethylene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods;
163C	6305 32 00	Flexible intermediate bulk containers”.

2. This notification shall come into force on the 1^st day of January, 2020.

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

Note: - The principal notification No.1/2017-Integrated Tax (Rate), dated the 28th June, 2017 was 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 and was last amended by notification No. 14/2019-Integrated Tax (Rate), dated the 30^th September, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 710(E), dated the 30^th September, 2019.

📚 Frequently Asked Questions (FAQs): Notification No. 26/2019 - Integrated Tax (Rate)

Q1: What is Notification No. 26/2019 – Integrated Tax (Rate)?

Answer:
It amends Notification No. 01/2017 – Integrated Tax (Rate) to shift certain packaging goods from 12% to 18% IGST, effective 1 January 2020 notfctn-26-2019-igst-rate-engli….

Q2: From which date is the revised IGST rate applicable?

Answer:
The revised rate applies from 1 January 2020.

Q3: Which goods are affected by this notification?

Answer:
Woven and non-woven bags/sacks of polypropylene or polyethylene
Flexible Intermediate Bulk Containers (FIBCs)

Q4: What was the earlier GST rate on these goods?

Answer:
Earlier, these goods were taxable at 12% IGST.

Q5: What is the new GST rate after this notification?

Answer:
They are now taxable at 18% IGST.

Q6: Which schedules are amended in Notification No. 01/2017?

Answer:
Schedule II (12%) – Entries omitted
Schedule III (18%) – New entries added

Q7: Can you explain with a real-life example?

Answer:
📌 Example:
A manufacturer sells polypropylene woven bags worth ₹1,00,000:
Before 1 Jan 2020 → IGST @ 12% = ₹12,000
On/after 1 Jan 2020 → IGST @ 18% = ₹18,000

Q8: Does this change affect existing stock?

Answer:
Yes ✅.
Any supply made on or after 1 January 2020 attracts 18% IGST, regardless of manufacturing date.

Q9: Is Input Tax Credit (ITC) available on 18% IGST?

Answer:
Yes ✅.
ITC can be claimed subject to Section 16 of the CGST Act, 2017.

Q10: Do businesses need to update accounting systems?

Answer:
Absolutely ✅.
HSN-wise GST rates must be updated in:
ERP systems
Billing software
GST return workflows

Q11: Does this notification impact GST registration?

Answer:
Indirectly.
Higher tax liability may affect turnover planning and compliance.
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Q12: Is this change applicable only to inter-State supplies?

Answer:
Yes.
This notification deals with IGST (inter-State supplies).

Q13: Was this change recommended by the GST Council?

Answer:
Yes ✅.
It was recommended in the 38th GST Council Meeting (18.12.2019).

Q14: Are there penalties for charging the wrong GST rate?

Answer:
Yes ❌.
Wrong rate application can lead to:
Tax shortfall
Interest
Penalties

Q15: Who should carefully review Notification No. 26/2019 – Integrated Tax (Rate)?

Answer:
Packaging manufacturers
Bulk goods traders
Exporters/importers
GST professionals
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