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Alerts:

Indirect Tax Alert: GST rate notifications

04 October 2021

The CBIC has issued various notifications thereby exempting/increasing/reducing the GST rate on few goods/services including the rate rationalisation on temporary or permanent transfer or permitting the use or enjoyment of IPR, basis recommendations of the 45th GST Council meeting.  The changes are given below:

 

Changes in GST rates on services

The exemptions and the rate changes shall be effective from 1 October 2021, as under:

Sl. No.

Services

Old rate (%)

New rate (%)

1.

Validity of GST exemption on transport of goods by vessel and air from India to outside India is extended up to 30 September 2022.

Nil

Nil

2.

Services by way of grant of National Permit to goods carriages on payment of fee.

18

Nil

3.

Skill Training for which Government bears 75% or more of the expenditure. Presently exemption applies only if Govt funds 100%.

18

Nil

4.

Services by way of right to admission to the events organised under AFC Women’s Asia Cup 2022.

18

Nil

5.

Services provided by and to Asian Football Confederation (AFC) and its subsidiaries directly or indirectly related to any of the events under AFC Women’s Asia Cup 2022 to be hosted in India.

(Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under AFC Women’s Asia Cup 2022.)

18

Nil

6.

Admission to such facilities that have casinos etc.

18

28

7.

Services by way of job work in relation to manufacture of alcoholic liquor for human consumption.

Earlier, it was covered under Entry 26, item no.(i)(f), as food and food products.

5

18

8.

Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property right (“IP right”) in respect of goods other than Information Technology software.

12

18

9.

Printing and reproduction services of recorded media where content is supplied by the publisher (to bring it on parity with colour printing of images from film or digital media)

12

18

 

  • The exemption on services provided by and to Federation Internationale de Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020 to be hosted in India shall be available whenever the event is rescheduled;
  • Exemption on leasing of rolling stock by Indian Railways Finance Corporation(IRFC) to Indian to Indian Railways has been withdrawn;
  • Wherever exemptions or applicable tax rates for trusts covered under section 12AA of Income Tax Act, 1961 has been extended to 12AB of Income Tax Act, 1961 also.

[Notification no:06 & 07/2021–Central Tax (Rate) dated 30 September 2021]

 

Changes in GST rates on goods

The exemptions and the rate changes shall be effective from 1 October 2021, as under:

Sl. No.

Goods

Old rate (%)

New rate (%)

1.

Retro fitment kits for vehicles used by the disabled

Applicable Rate

5

2.

Tamarind seeds meant for any use other than sowing.

They fall under heading 1209, and hitherto attracted nil rate irrespective of use. However, henceforth they would attract 5% GST rate (w.e.f. 1 October 2021) for use other than sowing. Seeds for sowing will continue at nil rate.

Applicable Rate

5

3.

Medicine Keytruda for treatment of cancer

12

5

4.

Biodiesel supplied to OMCs for blending with Diesel

12

5

5.

Iron ores and concentrates, including roasted iron pyrites.

5

18

6.

Manganese ores and concentrates, including ferruginous manganese ores and concentrates with a manganese content of 20% or more, calculated on the dry weight.

5

12

7.

Copper ores and concentrates

5

18

8.

Nickel ores and concentrates

5

18

9.

Cobalt ores and concentrates

5

18

10.

Aluminium ores and concentrates

5

18

11.

Lead ores and concentrates

5

18

12.

Zinc ores and concentrates

5

18

13.

Tin ores and concentrates

5

18

14.

Chromium ores and concentrates

5

18

15.

Following renewable energy devices and parts for their manufacture:-

  • Bio-gas plant;
  • Solar power-based devices;
  • Solar power generator;
  • Windmills, Wind Operated Electricity Generator (WOEG);
  • Waste to energy plants / devices;
  • Solar lantern / solar lamp;
  • Ocean waves/tidal waves energy devices/plants;
  • Photo voltaic cells, whether or not assembled in modules or made up into panels.

Explanation: If the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and services, one of which being a taxable service specified in the entry at S. No. 38 of the Table mentioned in the notification no:11/2017-Central Tax (Rate), dated 28 June 2017 [G.S.R. 690(E)], the value of supply of goods for the purposes of this entry shall be deemed as seventy percent of the gross consideration charged for all such supplies, and the remaining thirty percent of the gross consideration charged shall be deemed as value of the said taxable service.

5

12

16.

Cartons, boxes, cases, bags, and other packing containers, of paper, paperboard, cellulose wadding, or webs of cellulose fibres; box files, letter trays, and similar articles, of paper or paperboard of a kind used in offices, shops, or the like.

12/18

18

17.

Waste, Parings and Scrap, of Plastics.

5

18

18.

Plans and drawings for architectural, engineering, industrial, commercial, topographical, or similar purposes, being originals drawn by hand; hand-written texts; photographic reproductions on sensitised paper and carbon copies of the foregoing.

12

18

19.

Unused postage, revenue, or similar stamps of current or new issue in the country in which they have, or will have, a recognised face value; stamp-impressed paper; banknotes; cheque forms; stock, share or bond certificates and similar documents of title (other than Duty Credit Scrips).

12

18

20.

Transfers (decalcomanias).

12

18

21.

Printed or illustrated postcards; printed cards bearing personal greetings, messages, or announcements, whether or not illustrated, with or without envelopes or trimmings.

12

18

22.

Calendars of any kind, printed, including calendar blocks.

12

18

23.

Other printed matter, including printed pictures and photographs; such as Trade advertising material, Commercial catalogues and the like, printed Posters, Commercial catalogues, Printed inlay cards, Pictures, designs and photographs, Plan, and drawings for architectural engineering, industrial, commercial, topographical, or similar purposes reproduced with the aid of computer or any other devices.

12

18

24.

Ball point pens; felt tipped and other porous tipped pens and markers; fountain pens; stylograph pens and other pens; duplicating stylos; pen holders, pencil holders and similar holders; parts (including caps and clips) of the foregoing articles, other than those of heading 9609.

12/18

18

25.

Railway parts, locomotives & other goods in Chapter 86.

12

18

26.

Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice.*

18

28

 

*Compensation cess of 12% shall be additionally levied.

[Notification no:08 & 09/2021–CT(R) & 01/2021-Compensation Cess (R) F.No.190354/206/2021-TRU dated 30 September 2021]

 

RCM applicability on supply of mentha/essential oil

  • CBIC notified that the Reverse Charge Mechanism (RCM) is applicable on supply of mentha oil by unregistered person to registered person;
  • RCM is applicable on Essential oils other than those of citrus fruit namely:
    • Of peppermint (Mentha piperita);
    • Of other mints spearmint oil (ex-menthe spicata), Water mint-oil (ex-mentha aquatic), Horsemint oil (ex-mentha sylvestries), Bergament oil (ex-mentha citrate) supplied from any unregistered person to registered person under the Tariff item, sub-heading, heading or Chapter namely 33012400, 33012510, 33012520, 33012530, 33012540.
  • This notification shall be effective from 01 October 2021;

[Notification no:10/2021–Central Tax (Rate) dated 30 September 2021]

 

Reduction in rate of GST on supplies intended for free distribution to EWS of Society

  • CBIC has notified that GST @5% would be payable on food preparations put up in unit containers, intended for free distribution to Economically Weaker Sections (EWS) of society.
  • Also, fortified rice kernel (Premix) supply for ICDs or similar scheme duly approved by the Central Government, or any State Government shall be taxable at 5%, if condition of production of certificate to the effect that such goods have been distributed free to the EWS of the society, is satisfied.
  • This notification shall be effective from 01 October 2021.

[Notification no:11/2021–Central Tax (Rate) dated 30 September 2021]

 

Extension on concessional rate benefits to specified drugs used in COVID treatment

CBIC has, further extended the duration of concessional rate benefit on specified drugs used in COVID treatment as well as further reduces GST rate on other specified drugs used in COVID treatment as under:

  • Extension of existing concessional GST rates on following COVID-19 treatment drugs, up to 31 December 2021 from 30 September 2021, namely-
    • Amphotericin B – Nil
    • Remdesivir – 5%
    • Tocilizumab – Nil
    • Heparin (anti-coagulant) – 5%
  • Further reduction of GST rate to 5% on other COVID-19 treatment drugs, valid up to 31 December 2021, namely-
    • Itolizumab
    • Posaconazole
    • Infliximab
    • Favipiravir
    • Casirivimab & Imdevimab
    • 2-Deoxy-D-Glucose
    • Bamlanivimab & Etesevimab

This notification shall be effective from 01 October 2021;

[Notification no:12/2021–Central Tax (Rate) dated 30 September 2021]

 

Changes in GST rates on temporary or permanent transfer or permitting the use or enjoyment of IPR

  • The term ‘Intellectual Property Right’ (IPR) has not been defined in GST Law. MF(DR) circular No. B2/8/2004-TRU dated 10-9-2004 states as follows – Intellectual property emerges from application of intellect, which may be in the form of an invention, design, product, process, technology, book, goodwill, etc.
  • Both the permanent transfer of IPR and temporary transfer are subject to GST.
  • Though IPR itself is a ‘Good’ but license to use IPR is a ‘Service’. As per Para c of schedule II of CGST Act: Temporary transfer or permitting the use or enjoyment of any IPR is ‘supply of service’
  • Central Board of Indirect Taxes and Customs (CBIC) vide notification no:06/2021-CT (R) dated 30 September 2021, has notified that GST @18% shall be levied on Temporary or permanent transfer or permitting the use or enjoyment of IPR;
  • Prior to this notification, IP right w.r.t. Information Technology software were charged at 18% and IP right w.r.t. other goods were chargeable at 12%, as summarised below:

 

S.No.

Heading

Description of Service

Rates

17

Heading 9973

Temporary or permanent transfer or permitting the use or enjoyment of intellectual property rights in respect of goods other than Information Technology software

12%

Temporary or permanent transfer or permitting the use or enjoyment of intellectual property rights in respect of Information Technology software

18%

 

  • The changes in the rate shall be effective from 1 October 2021.

[Notification no:06/2021–Central Tax (Rate) dated 30 September 2021]

 

Note:

Certain recommendations of the 45th GST council are yet to be notified including rate on

  • Ice cream parlor that sells already manufactured ice- cream
  • Overloading charges at toll plaza
  • Services by way of grant of mineral exploration and mining rights