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Circular No. 179/11/2022-GST
F. No. CBIC-190354/172/2022-TRU
Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)
*****
North Block, New Delhi
Date: 3
rd
August, 2022
To,
Principal Chief Commissioners/ Principal Directors General,
Chief Commissioners/ Directors General,
Principal Commissioners/ Commissioners of Central Excise & Central Tax
Madam/ Sir,
Subject: Clarification regarding GST rates & classification (goods) based on the
recommendations of the GST Council in its 47
th
meeting held on 28
th
– 29
th
June,
2022 at Chandigarh –reg.
Based on the recommendations of the GST Council in its 47
th
meeting held on 28
th
-
29
th
June at Chandigarh, clarifications, with reference to GST levy, related to the following
are being issued through this circular:
2. Electric vehicles whether or not fitted with a battery pack, attract GST rate of 5%:
2.1. Representations have been received seeking clarification regarding the applicable rate of
GST on electrically operated vehicle without any battery fitted to it.
2.2. The explanation of ‘Electrically operated vehicles’ in entry 242A of Schedule I of
notification No. 1/2017-Central Tax (Rate) reads as: ‘Electrically operated vehicles
which run solely on electrical energy derived from an external source or from one or
more electrical batteries fitted to such road vehicles and shall include E-bicycles.’
2.3. As is evident from the explanation above, electrically operated vehicle including three
wheeled electric vehicle means vehicle that runs solely on electrical energy derived from
an external source or from electrical batteries. Therefore, the fitting of batteries cannot be
considered as a concomitant factor for defining a vehicle as an electrically operated
electric vehicle.
2.4. It is also pertinent to state that the WCO’s HSN Explanatory notes have also not
considered batteries to be a component, whose absence changes the essential character of
an incomplete, unfinished or unassembled vehicle.
2.5. Also, the HSN explanatory notes for Chapter 87 have clearly stated that Motor Chassis
fitted with cabs i.e. the chassis fitted with cabin body falls under 87.02 to 87.04 and not
in heading 87.06.
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2.6. In view of the above, it is clarified that electrically operated vehicle is to be classified
under HSN 8703 even if the battery is not fitted to such vehicle at the time of supply and
thereby attract GST at the rate of 5% in terms of entry 242A of Schedule I of notification
No. 1/2017-Central Tax (Rate).
3. Stones otherwise covered in S. No. 123 of Schedule-I (such as Napa stones), which
are not mirror polished, are eligible for concessional rate under said entry:
3.1. Representations have been received seeking clarification regarding the applicable GST
rates on building stones, in particular Napa Stones, which are ready to use and polished
in ways other than mirror-polished.
3.2. Napa Stone is a variety of dimensional limestone, which is a brittle stone and cannot be
subject to extensive mirror polishing. Currently, S. No. 123 of Schedule-I prescribes
GST rate of 5% for ‘Ecaussine and other calcareous monumental or building stone;
alabaster [other than marble and travertine], other than mirror polished stone which is
ready to use.’ However, being brittle in nature, stones like Napa Stone, even though
ready for use, are not subject to extensive polishing. Therefore, such minor polished
stones do not qualify as mirror polished stones.
3.3. Therefore, it is clarified that S. No. 123 in schedule-I to the notification No. 1/2017-
Central Tax (rate) dated 28.06.2017 covers minor polished stones.
4. Mangoes under CTH 0804 including mango pulp, but other than fresh mangoes and
sliced, dried mangoes, attract GST at 12% rate:
4.1. Representations have been received seeking clarification regarding the applicable GST
rate on different forms of Mangoes including Mango Pulp.
4.2. On the basis of the recommendation of the GST Council in its 22
nd
Meeting, the GST
rate on ‘Mangoes sliced, dried’, falling under heading 0804, was reduced from 12% to
5% [S. No. 30A of Schedule I of notification No. 1/2017-Central Tax (Rate) dated the
28
th
June, 2017]. However, the GST rate on all forms of dried mangoes (other than sliced
and dried mangoes), falling under heading 0804, including mango pulp, was always
meant to be at the rate of 12%.
4.3. Accordingly, it is hereby clarified that mangoes, fresh falling under heading 0804 are
exempt; Mangoes, sliced and dried, falling under 0804 are chargeable to a concessional
rate of 5%; while all other forms of dried mango, including Mango pulp, attract GST at
the rate of 12%. To bring absolute clarity, the relevant entry at S. No. 16 of Schedule-II
of notification no. 1/2017-Central Tax (Rate), dated 28
th
June, 2017, has been amended
vide notification No. 6/2022-Central Tax (Rate), dated the 13
th
July, 2022.
4.4. Fresh mangoes, falling under heading 0804, continue to remain exempt from GST [S.
No. 51 of notification No. 2/2017-Central Tax (Rate), dated the 28
th
June, 2017].
5. Treated sewage water attracts Nil rate of GST:
5.1. Representations have been received seeking clarification regarding the applicable
GST rate on treated sewage water. Treated sewage water was not meant to be construed
as falling under “purified” water for the purpose of levy of GST.
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5.2. In general, Water, falling under heading 2201, with certain specified exclusions, is
exempt from GST vide entry at S. No. 99 of notification No. 2/2017-Central Tax (Rate),
dated the 28th June, 2017.
5.3. Accordingly, it is hereby clarified that supply of treated sewage water, falling under
heading 2201, is exempt under GST. Further, to clarify the issue, the word 'purified' is
being omitted from the above-mentioned entry vide notification No. 7/2022-Central Tax
(Rate), dated the 13
th
July, 2022.
6. Nicotine Polacrilex Gum attracts a GST rate of 18%:
6.1. Representations have been received seeking clarification regarding the classification
and applicable GST rate on Nicotine Polacrilex gum.
6.2. The WCO 2022 HS Codes has inter alia introduced a new entry 2404 91 00 comprising
of products for oral application containing nicotine and intended to assist tobacco use
cessation with effect from 01.01.2022. Accordingly, a technical change, without any
consequential rate change, has been made vide notification No. 18/2021 – Central Tax
(Rate), dated the 28
th
December, 2021, wherein S. No. 26B in Schedule III of notification
no. 1/2017-Central Tax (Rate), dated the 28
th
June, 2017, has been inserted to include
products for oral application containing nicotine and intended to assist in cessation of use
of tobacco, and falling under tariff item 2404 91 00. The same is supplemented by the
HS Explanatory notes 2022 which states that heading 2404 includes nicotine containing
products for recreational use, as well as nicotine replacement therapy (NRT) products
intended to assist tobacco use cessation, which are taken as part of a nicotine intake
reduction programme in order to lessen the human body’s dependence on this substance.
6.3. Accordingly, it is hereby clarified that the Nicotine Polacrilex gum which is commonly
applied orally and is intended to assist tobacco use cessation is appropriately classifiable
under tariff item 2404 91 00 with applicable GST rate of 18% [Sl. No. 26B in Schedule
III of notification no. 1/2017-Central Tax (Rate), dated the 28
th
June, 2017].
7. Fly ash bricks and aggregate - condition of 90% fly ash content applied only to fly
ash aggregate, and not fly ash bricks:
7.1. Representations have been received seeking clarification regarding the applicable rate on
the fly ash bricks and fly ash aggregates.
7.2. Hitherto, as per entry at S. No. 176B of the Schedule II the items of description “Fly ash
bricks or fly ash aggregate with 90 per cent. or more fly ash content; Fly ash blocks”
attracts a GST rate of 12%. Confusion has arisen about the applicability of 90 per cent.
condition on fly ash aggregates and fly ash bricks. As per the recommendations of the
GST Council in the 23
rd
Meeting, the condition of 90% or more fly ash content was
applicable only for fly ash aggregate.
7.3. Therefore, it is clarified that the condition of 90 per cent. or more fly ash content applied
only to Fly Ash Aggregates and not to fly ash bricks and fly ash blocks. Further, with
effect from 18
th
July, 2022 the condition is omitted from the description.
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8. Applicability of GST on by-products of milling of Dal/ Pulses such as Chilka,
Khanda and Churi:
8.1. Representations have been received seeking clarification regarding the applicable
GST rate on by-products of milling of Dal/ Pulses such as Chilka, Khanda and Churi.
8.2. The by-products of milling of pulses/ dal such as Chilka, Khanda and Churi are
appropriately classifiable under heading 2302 that consists of goods having description
as bran, sharps and other residues, whether or not in the form of pellets, derived from the
sifting, milling or other working of cereals or of leguminous plants.
8.3. The applicable GST rate on goods falling under heading 2302 is detailed in the Table
below:
Entry and notification
No.
Description GST Rate
S. No. 102 of notification
No. 2/2017-Central Tax
(Rate), dated the 28
th
June, 2017
Aquatic feed including shrimp feed and
prawn feed, poultry feed & cattle feed,
including grass, hay & straw, supplement
& husk of pulses, concentrates &
additives, wheat bran & de-oiled
cake[other than rice bran]
Nil
S. No. 103A of Schedule-
I of notification No.
1/2017-Central Tax
(Rate), dated 28
th
June,
2017
Bran, sharps and other residues, whether
or not in the form of pellets, derived from
the sifting, milling or other working of
cereals or of leguminous plants [other
than aquatic feed including shrimp feed
and prawn feed, poultry feed and cattle
feed, including grass, hay and straw,
supplement and husk of pulses,
concentrates and additives, wheat bran
and de-oiled cake]
5%
S. No. 103B of Schedule-
I of notification No.
1/2017-Central Tax
(Rate), dated 28
th
June,
2017
Rice bran (other than de-oiled rice bran) 5%
8.4. The dispute in applicable GST rate revolves around the central argument as to whether
the above-mentioned by-products are meant for direct consumption as cattle feed and
therefore attract exemption under S. No. 102 of notification No. 2/2017-Central Tax
(Rate) dated 28
th
June, 2017 or are otherwise not meant for direct consumption and thus
covered under S. No. 103A of notification No. 1/2017- Central Tax (Rate) dated 28
th
June, 2017 attracting a GST rate of 5%.
8.5. While milling of pulses/ dal, a wide range of by-products such as chilka, khanda, churi,
among others, are obtained which are preferred as cattle feed by dairy industry for better
palatability and higher nutritive value. The mentioned by-products are required to go
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through varying degrees of processing in order to customize the color, size, aroma,
nutrition, purity, etc., of the cattle feed so produced, depending upon the dietary and
nutritional requirement of the cattle and the budget availability of the customer(s).
Further, as per the Indian Standards 2052:2009 -Compounded Feeds for Cattle —
Specification, issued by the Bureau of Indian Standards, Ministry of Consumer Affairs,
Food & Public Distribution, Government of India, grain by-products have been
categorized as one of the ingredients of the compounded cattle feed.
8.6. The GST Council examined the issue and recommended that a clarification be issued in
this regard. It also recommended that in view of the prevailing multiple interpretations
and genuine doubts regarding the applicability of GST, the issue for past periods may be
regularized on as is basis.
8.7. Accordingly, it is hereby clarified that the subject goods which inter alia is used as cattle
feed ingredient are appropriately classifiable under heading 2302 and attract GST at the
rate of 5% vide S. No. 103A of Schedule-I of notification no. 1/2017-Central Tax (Rate),
dated the 28
th
June, 2017 and that for the past, the matter would be regularized on as is
basis as mentioned in para 8.6.
9. Difficulty if any, in the implementation of this circular may be brought to the notice of
the Board.
Yours faithfully,
(Nitish Karnatak)
Under Secretary to the Government of India
