GST Notification on revised tax rates for various goods and services with effect from 1 January 2019

Introduction

The CBIC has  issued several GST Notifications in order to put the existing confusions and differences in interpretation to rest in relation to classification and tax treatment of various goods and services.

From time to time, the Government has undertaken a critical review of the tax rates and classification of various goods and services under the Goods and Services Tax (‘GST’) law.

In this process, the tax rates of various goods and services have been recommended for reduction/ exemption by the GST Council during the 31st Meeting held on 22 December 2018.

These decisions also fulfil the industry representations at large and would reduce the burden on ultimate consumers.

In addition, certain services in relation to payment of GST have been shifted to the service recipient under reverse charge mechanism (‘RCM’).

The gist of the notifications along with the earlier and revised tax rates along with the links to the notification have been summarised below for ease of reference:

Notification No.24/2018-Central Tax (Rate) – Changes in the tax rates of various goods

S.noChapter HeadingDescription of GoodsEarlier rateRevised rate (w.e.f 1 January 2018)
12515 11 00Marble and travertine, crude or roughly trimmed18%5%
24501Natural cork, raw or simply prepared12%5%
364Footwear of sale value not exceeding Rs.1000 per pair18%5%
48714 20Parts and accessories of carriage for disabled persons28%5%
56602 00 00Walking-sticks including seat sticks12%5%
66815Fly ash bricks or fly ash aggregate with 90 per cent. or more fly ash content; Fly ash blocks12%5%
76305 32 00Flexible intermediate bulk containers5%/12%Uniform rate of 5%
84012Retreaded or used pneumatic tyres of rubber; solid or cushion tyres, tyre treads and tyre flaps, of rubber28%18%
94502 00 00Natural cork, debacked or roughly squared, or in rectangular (including square) blocks, plates, sheets or strip (including sharp-edged blanks for corks or stoppers)18%12%
104503Articles of natural cork such as Corks and Stoppers, Shuttlecock cork bottom18%12%
114504Agglomerated cork (with or without a binding substance) and articles of agglomerated cork ”18%12%
128483Transmission shafts (including cam shafts and crank shafts) and cranks; bearing housings and plain shaft bearings; gears and gearing; ball or roller screws; gear boxes and other speed changers, including torque converters; flywheels and pulleys, including pulley blocks; clutches and shaft couplings (including universal joints)28%18%
138507Lithium-ion accumulators (other than battery) including lithium-ion power bank28%18%
14Digital cameras and video camera recorders28%18%
15Monitors and Televisions upto screen size of 32 inches28%18%
169504Video game consoles and machines, articles of funfair, table or parlour games, including pintables, billiards, special tables for casino games and automatic bowling alley equipment [other than playing cards, ganjifa card, chess board, carom board and other board games of 9504 90 90 like ludo, etc.]28%18%

Notification No.25/2018-Central Tax (Rate) – Exemptions in tax rates for supply of goods

S.noChapter HeadingDescription of GoodsEarlier rateRevised rate (w.e.f 1 January 2018)
1710Vegetables (uncooked or cooked by steaming or boiling in water), frozen5%Nil
2711Vegetables provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption5%Nil
34904 00 00Music, printed or in manuscript, whether or not bound or illustrated12%Nil
4Any ChapterSupply of gift items received by the President, Prime Minister, Governor or Chief Minister of any State or Union territory, or any public servant, by way of public auction by the Government, where auction proceeds are to be used for public or charitable cause”-Nil

Notification No.27/2018-Central Tax (Rate) – Changes in the tax rates of various services

S.noDescription of ServicesEarlier rateRevised rate (w.e.f 1 January 2018)
1Supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided in the premises of a school or college5%Nil
2Transportation of passengers, with or without accompanied baggage, by air, by non-scheduled air transport service or charter operations, engaged by specified organisations in respect of religious pilgrimage facilitated by the Government of India, under bilateral arrangement.12%5% with Input Tax Credit
3Service of third party insurance of goods carriage18%12%
4Leasing or renting of goods18%Same rate of central tax as applicable on supply of like goods involving transfer of title in goods
5Services by way of admission to exhibition of cinematograph films where price of admission ticket is above one hundred rupees.28%18%
6Service by way of construction or engineering or installation or other technical services, provided in relation of setting up of following,

(a) Bio-gas plant
(b) Solar power based devices
(c) Solar power generating system
(d) Wind mills, Wind Operated Electricity Generator (WOEG)
(e) Waste to energy plants / devices
(f) Ocean waves/tidal waves energy devices/plants
5% of total EPC value●         70% of EPC contract value amounts to supply taxable @ 5%
●        50% of the EPC contract value amounts to services taxable @ 18%

Notification No.28/2018-Central Tax (Rate) – Exemptions in tax rates for supply of goods

S.noDescription of ServicesEarlier rateRevised rate (w.e.f 1 January 2018)
1Services provided by a goods transport agency, by way of transport of goods in a goods carriage, to, -

(a) a Department or Establishment of the Central Government or State Government or Union territory; or

(b) local authority; or

(c) Governmental agencies,

which has taken registration under the GST law only for the purpose of deducting tax under Section 51 and not for making a taxable supply of goods or services.
18%Nil
2Services provided by a banking company to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY).18%Nil
3Loan guarantee services provided by Government to its undertakings and PSUs for bank loans.18%Nil
4Services supplied by rehabilitation professionals recognised under Rehabilitation Council of India Act, 1992 at hospitals, schools or rehabilitation centres established by Government or charitable institute registered under Section 12AA of The Income tax Act,196118%Nil

Notification No.29/2018-Central Tax (Rate) – Reverse charge on security services

S.noDescription of Services Service ProviderObligation to pay GST under reverse charge mechanism
1Services provided by business facilitator (BF) to a banking companyBusiness facilitator (BF)A banking company, located in the taxable territory
2Services provided by an agent of business correspondent (BC) to the Business CorrespondentAgent of Business CorrespondentBC
3Security services (services provided by way of supply of security personnel) provided to a registered personAny person other than a body corporateA registered person, located in the taxable territory

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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