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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: 3rd 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 47th meeting held on 28th – 29th June,
2022 at Chandigarh –reg.
Based on the recommendations of the GST Council in its 47th meeting held on 28th-
29th 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 22nd 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
28th 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 28th June, 2017, has been amended
vide notification No. 6/2022-Central Tax (Rate), dated the 13th 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 28th 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 13th 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 28th December, 2021, wherein S. No. 26B in Schedule III of notification
no. 1/2017-Central Tax (Rate), dated the 28th 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 28th 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 23rd 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 18th July, 2022 the condition is omitted from the description.
