GST Council decides to reduce tax rates on 29 goods

The GST Council chaired by finance minister Arun Jaitley on Thursday recommended certain changes in GST/IGST rates rate on certain goods and issued clarifications in respect of GST on certain other goods.

The 25th meeting of the GST Council Meeting held on Thursday decided to slash rates on 29 goods and 53 services, even as the council postponed a discussion on GST on petrol and diesel to its next meeting.

These decisions will be given effect through Gazette notifications / circulars.

Goods on which GST rate to be reduced from 28 per cent to 18 per cent:

• Old and used motor vehicles (medium and large cars and SUVs) on the margin of the supplier, subject to the condition that no input tax credit of central excise duty/value added tax or GST paid on such vehicles has been availed by him;
• Buses, for use in public transport, which exclusively run on bio-fuels;

Goods on which GST rate to be reduced from 28 per cent to 12 per cent:

• All types of old and used motors vehicles (other than medium and large cars and SUVs) on the margin of the supplier of subject to the conditions that no input tax credit of central excise duty /value added tax or GST paid on such vehicles has been availed by him.

Goods on which GST rate to be reduced from 18 per cent to 12 per cent:

• Sugar boiled confectionary;
• Drinking water packed in 20 litters bottles;
• Fertilizer grade Phosphoric acid;
• Bio-diesel;
• Bio-pesticides – including Bacillus thuringiensis var. israelensis, Bacillus thuringiensis var. kurstaki, Bacillus thuringiensis var. galleriae, Bacillus sphaericus, Trichoderma viride, Trichoderma harzianum, Pseudomonas fluoresens, Beauveriabassiana, NPV of Helicoverpaarmigera, NPV of Spodopteralitura, Neem based pesticides and Cymbopogan;
• Bamboo wood building joinery;
• Drip irrigation system, including laterals, sprinklers; and
• Mechanical Sprayer

Goods on which GST rate to be reduced from 18 per cent to 5 per cent:

• Tamarind kernel powder;
• Mehendi paste in cones;
• LPG supplied for supply to household domestic consumers by private LPG distributors;
• Scientific and technical instruments, apparatus, equipment, accessories, parts, components, spares, tools, mock-ups and modules, raw material and consumables required for launch vehicles and satellites and payloads

Gods on which GST rate is to be reduced from 12 per cent to 5 per cent:

• Articles of straw, of esparto or of other plaiting materials;
• Basketware and wickerwork

Goods on which GST rate to be increased from 12 per cent to 18 per cent:

• Cigarette filter rods

Goods on which GST rate to be reduced from 12 per cent to 5 per cent (with no refund of unutilised input tax credit):

• Velvet fabric

Goods on which GST rate to be reduced from 3 per cent to 0.25 per cent:

• Diamonds and precious stones

Nil GST rate:

• Vibhuti;
• Parts and accessories for manufacture of hearing aids;
• De-oiled rice bran

Goods on which GST rate to be increased from nil to 5 per cent:

• Rice bran (other than de-oiled rice bran)

Changes in compensation cess on certain goods (from 15 per cent to nil):

• Motor vehicles (falling under heading 8702, as it was in excise regime) cleared as ambulances, duly fitted with all fitments, furniture and accessories necessary for an ambulance from the factory manufacturing such vehicles. Ten-13 seater buses and ambulances, subject to specified conditions.
• Old and used motor vehicles (medium and large cars and SUVs), on the margin of the supplier, subject to the condition that no input tax credit of central excise duty/value added tax or GST paid on such vehicles has been availed by him.
• All types of old and used motors vehicles (other than medium and large cars and SUVs) on the margin of the supplier of subject to the conditions that no input tax credit of central excise duty /value added tax or GST paid on such vehicles has been availed by him.

Changes in IGST rate recommended on certain goods (from 18 per cent to 5 per cent):

• Satellites and payloads and Scientific and technical instruments, apparatus, equipment, accessories, parts, components, spares, tools, mock ups and modules, raw material and consumables required for launch vehicles and satellites and payloads.

Modification in definition / clarification in respect of changes in GST/IGST rates on goods:

• Poly Butylene Feed Stock & Liquefied Petroleum Gas (18 per cent)

GST to apply only on the net quantity of Poly Butylene Feed Stock or Liquefied Petroleum Gases retained for the manufacture of Poly Iso Butylene or Propylene or di-butyl para cresol respectively, subject to specified conditions.

Only the goods falling under chapter 86 attract 5 per cent GST rate with no refund of unutilised ITC. Goods falling in any other chapter will attract applicable GST rate under the respective chapters, even if supplied to the Indian railways.

Coal rejects will attract 5 per cent plus Rs400 PMT Compensation Cess.

The GST council proposes to issue a notification giving effect to the recommendations of the Council on 25 January 2018 to be effective on the same day.