Circular No. 163/19/2021-GST
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Circular No. 163/19/2021-GST
F. No. 190354/206/2021-TRU
Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)
*****
North Block, New Delhi
Date: 6th October, 2021
To,
Principal Chief Commissioners/ Principal Director Generals,
Chief Commissioners/ Director Generals,
Principal Commissioners/ Commissioners of Central Excise & Central Tax(All),
Madam/ Sir,
Subject: Clarification regarding GST rates & classification (goods) based on
the recommendations of the GST Council in its 45th meeting held on 17th
September, 2021 at Lucknow–reg.
Based on the recommendations of the GST Council in its 45th meeting held on 17th
September, 2021, at Lucknow, clarification, with reference to GST levy, related to the
following are being issued through this circular:
i.
Fresh vs dried fruits and nuts;
ii.
Classification and applicable GST rates on Tamarind seeds;
iii.
Coconut vs Copra;
iv.
Classification and applicable GST rate on Pure henna powder and leaves, having
no additives;
v.
Scented sweet supari and flavored and coated illaichi;
vi.
Classification of Brewers' Spent Grain (BSG), Dried Distillers’ Grains with
Soluble [DDGS] and other such residues and applicable GST rate;
vii.
GST rates on goods [miscellaneous pharmaceutical products] falling under
heading 3006;
Circular No. 163/19/2021-GST
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viii.
Applicability of GST rate of 12% on all laboratory reagents and other goods
falling under heading 3822;
ix.
Requirement of Original/ import Essentiality certificate, issued by the Directorate
General of Hydrocarbons (DGH) on each inter-State stock transfer of goods
imported at concessional GST rate for petroleum operations;
x.
External batteries sold along with UPS Systems/ Inverter;
xi.
Specified Renewable Energy Projects;
xii.
Fiber Drums, whether corrugated or non-corrugated.
2. The issue-wise clarifications are discussed in detail below.
3. Applicability of GST on fresh and dried fruits and nuts:
3.1 Representations have been received seeking clarification regarding the
distinction between fresh and dried fruits and nuts and applicable GST rates.
3.2 At present, fresh nuts (almond, walnut, hazelnut, pistachio etc) falling under
heading 0801 and 0802 are exempt from GST, while dried nuts under these headings
attract GST at the rate of 5%/ 12%. The general Explanatory Notes to chapter 08
mentions that this chapter covers fruit, nuts intended for human consumption. They
may be fresh (including chilled), frozen (whether or not previously cooked by
steaming or boiling in water or containing added sweetening matter) or dried
(including dehydrated, evaporated or freeze-dried).Thus, HS chapter differentiates
between fresh, frozen and dried fruits and nuts. Fresh fruit and nuts would thus cover
fruit and nuts which are meant to be supplied in the state as plucked. They continue to
be fresh even if chilled. However, fruit and nuts do not qualify as fresh, once frozen
(cooked or otherwise), or intentionally dried to dehydrate including through sun
drying, evaporation or freezing, for supply as dried fruits or nuts. It may be noted that
in terms of note 3 to Chapter 8, dried fruits, even if partially re-hydrated, or subject to
preservation say by moderate heat treatment, retain the character of dried fruits or
dried nuts.
3.3. Therefore, exemption from GST to fresh fruits and nuts covers only such
products which are not frozen or dried in any manner as stated above or otherwise
processed. Supply of dried fruits and nuts, falling under heading 0801 and 0802 attract
GST at the rate of 5%/12% as specified in the respective rate Schedules.
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4. Applicability of GST on tamarind seeds:
4.1 Representations have been received seeking clarification regarding classification
and applicable GST rates on tamarind seeds. The dispute is in classification of tamarind
seeds between tariff heading 1207 and 1209.
4.2 As per general Explanatory Notes to HS 2017, heading 1209, covering seeds, fruit
and spores, of a kind used for sowing, covers tamarind seeds. As per Chapter note 3 to
Chapter 12, for the purposes of heading 1209, beet seeds, grass and other herbage seeds,
seeds of ornamental flowers, vegetable seeds, seeds of forest trees, seeds of fruit trees,
seeds of vetches (other than those of the species Vicia faba) or of lupines are to be
regarded as “seeds of a kind used for sowing”. Thus, tamarind seeds, even if used for
any purpose other than sowing, is liable to be classified under heading 1209 and
hitherto attracted nil GST rate, irrespective of its use (for the period 01.07.2017 to
30.09.2021).
4.3 The GST council in its 45th meeting recommended GST rate on seeds, falling
under heading 1209, meant for any use other than sowing to 5% (S. No. 71A of schedule
I of notification No. 1/2017- Central Tax (Rate) dated 28.06.2017) and Nil rate would
apply only to seeds for this heading if used for sowing purposes (S. No. 86 of schedule
of notification No. 2/2017- Central Tax (Rate) dated 28.06.2017). Hence, with effect from
1.10.2021, tamarind and other seeds falling under heading 1209, (i.e. including tamarind
seeds), if not supplied as seed for sowing, would attract GST at the rate of 5%.
5. Clarification of definition of Copra:
5.1. Representations have been received seeking clarification regarding the definition
of Copra and applicable GST rates.
5.2 As per Explanatory Notes to HS (2017 edition) to heading 1203, Copra is dried
flesh of coconut generally used for the extraction of coconut oil. Coconut kernel turns
into copra, when it separates from the shell skin, while still being inside the shell. The
whole unbroken kernel could be taken out of shell only when it converts to copra. Once
taken out of shell, copra could be supplied either whole or broken.
5.3. As per the Explanatory Notes to HS, the heading 0801 covers coconut fresh or
dried but excludes Copra. Thus, exemption available to Coconut, fresh or dried,
whether or not shelled or peeled, vide entry at S. No. 47 of notification No. 2/2017-
Central Tax (Rate) dated 28.6.2017, is not available to Copra. Accordingly, Copra,
classified under heading 1203, attracts GST rate of 5% vide entry at S. No. 66 of
Schedule I of 1/2017-Central Taxes (Rate) dated 28.06.2017, irrespective of use.
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6. Applicability of GST on pure henna powder and leaves:
6.1 Representations have been received seeking clarification regarding classification
and applicable GST rates on henna powder and henna leaves.
6.2 As per the Explanatory Notes to HS 2017, heading 1404 is vegetable products not
elsewhere specified or included. Further, as per the said Explanatory Notes, heading
1404 includes raw vegetable materials of a kind used primarily in dyeing or tanning.
Such products are used primarily in dyeing or tanning either directly or in preparation
of dyeing or tanning extracts. The material may be untreated, cleaned, dried, ground or
powdered (whether or not compressed).
6.3 Accordingly, it is clarified that pure henna powder and henna leaves, having no
additives, is classifiable under tariff item 1404 90 90 and shall attract GST rate of 5% (S.
No. 78 of schedule I of notification No. 1/2017-Central Tax (Rate) dated 28.06.2017).
6.4. Further, the GST rate on mehndi paste in cones falling under heading 1404 and
3305 shall be 5% (S. No. 78A of schedule I of notification No. 1/2017-Central Tax (Rate)
dated 28.06.2017).
7. Applicability of GST on scented sweet supari & flavored and coated illaichi:
7.1 Representations have been received seeking clarification regarding classification
and applicable GST rates on flavored and coated illaichi, and scented sweet supari.
7.2 Scented sweet supari falls under tariff item 2106 90 30 as “Betel nut product”
known as “Supari” and attracts GST rate of 18% vide entry at S. No. 23 of Schedule III of
notification No. 1/2017-Central Tax (Rate) dated 28.6.2017.
7.3 Flavored and coated illaichi generally consists of Cardamom Seeds, Aromatic
Spices, Silver Leaf, Saffron, Artificial Sweeteners. It is distinct from illaichi or cardamom
(which falls under heading 0908). It is clarified that flavored and coated illaichi is a value
added product and falls under sub-heading 2106. It accordingly attract GST at the rate
of 18% (S. No. 23 of schedule III of notification No. 1/2017-Central Tax (Rate) dated
28.06.2017).
8. Applicability of GST on Brewers' Spent Grain (BSG), Dried Distillers’ Grains
with Soluble [DDGS] and other such residues:
8.1 Representations have been received seeking clarification regarding classification
and applicable GST rates on Brewers' spent grain (BSG), Dried distillers' grains with
soluble [DDGS] and other such residues of starch manufacture and similar residues,
