The Ministry of Finance, Department of Revenue (Tax Research Unit) has issued Circular No. 247/04/2025-GST, dated 14th February 2025, to clarify GST Rates and product classifications. These updates stem from the 55th GST Council Meeting held on 21st December 2024 in Jaisalmer. The goal is to ensure consistent tax implementation across different regions. Below are the important clarifications:
1. GST Rate and Classification for Pepper (Genus Piper)
Key Points:
- Concerns were raised regarding the GST rate for pepper under the genus Piper and whether agriculturists are exempt.
- It has now been clarified that green (fresh), white, or black pepper falls under HS Code 0904 and attracts 5% GST, as per S. No. 38 of Schedule I of Notification No. 1/2017-Central Tax (Rate), dated 28th June 2017.
- Dried pepper supplied directly by an agriculturist is exempt from GST, in accordance with Section 23(1)(b) of the CGST Act.
2. GST Applicability on Raisins Supplied by Agriculturists
Key Points:
- Queries were raised about GST on raisins sold by agriculturists.
- The Council has clarified that agriculturists supplying raisins do not have to register under Section 23(1) of the CGST Act, making their sales GST-exempt.
3. GST Rate on Ready-to-Eat Popcorn
Key Points:
- The GST classification and rates for ready-to-eat popcorn needed clarification.
- Popcorn mixed with salt and spices is categorized under HS Code 2106 90 99, with a 5% GST rate if unpackaged and 12% GST if sold as packaged and labeled, as per S. No. 46 of Schedule II.
- Caramel or sugar-coated popcorn is classified under HS Code 1704 90 90, attracting 18% GST, in accordance with S. No. 12 of Schedule III.
- To resolve prior confusion, transactions up to 14th February 2025 have been regularized on an ‘as is where is’ basis.
4. GST on Fly Ash-Based Autoclaved Aerated Concrete (AAC) Blocks
Key Points:
- Clarifications were needed regarding the GST rate for AAC blocks with at least 50% fly ash content.
- The Council has confirmed that fly ash-based AAC blocks fall under HS Code 6815 and attract 12% GST, as per S. No. 176B of Schedule II.
- Other cement-based products classified under HS Code 6810 attract 18% GST, in accordance with S. No. 181 of Schedule III.
5. Effective Date of Amended Entry for Ground Clearance in Motor Vehicles
Key Points:
- There was confusion regarding the effective date of amended entry 52B in Notification No. 1/2017-Compensation Cess (Rate), dated 28th June 2017.
- Initially, SUVs and utility vehicles with engines over 1500cc were subject to a 22% Compensation Cess.
- Following the 50th GST Council Meeting, Notification No. 03/2023 dated 26th July 2023 amended entry 52B, extending the 22% cess to all utility vehicles meeting these criteria:
- Engine capacity exceeding 1500cc
- Length over 4000mm
- Ground clearance of at least 170mm (in an unladen condition)
- The amendment is effective from 26th July 2023.
Conclusion
These clarifications in Circular No. 247/04/2025-GST provide clear tax guidelines for various products, including pepper, raisins, popcorn, AAC blocks, and utility vehicles. Businesses should align their tax practices accordingly to stay compliant.
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Published on: February 27, 2025