GST Rate Changes from 1st January 2023

A few items witnessed a GST rate slash beginning from 1st January 2023 in India. Further, few were exempted from GST. The Central Board of Indirect Taxes and Customs (CBIC) issued fresh CGST notifications on 30th December 2022, implementing the revisions made at the 48th GST Council meeting earlier the same month.

Notification no. 12/2022-Central Tax (Rate) revises the GST rates applicable to certain items. Earlier, ethyl alcohol sold to Oil Marketing Companies (OMCs) or Petroleum refineries for blending with motor spirit (petrol) attracted an 18% GST. The revision states that the above sale will attract 5% GST supplied on or after 1st January 2023. Accordingly, denatured ethyl alcohol and other spirits of any strength will continue to be charged 18% GST.

Sharp pellets, bran pellets, and pellets of any other residues or the same items in any other form obtained by sifting, milling or working of cereals or leguminous plants shall be taxed at a 5% GST rate. On the other hand, Notification no. 13/2022-Central Tax (Rate) exempts the supply of husks from pulses, chilka and concentrates, chuni or churi, and khanda primarily used as cattle feed. In simpler words, no GST is payable on the husks of pulses and the items given above for cattle feed.

Further, mathematical boxes, colour boxes and geometry boxes shall attract a GST rate of 12%, while pencil sharpeners have been kept out of this entry, unlike earlier. The fruit pulp or juice-based drinks, not carbonated, will have a 12% GST levy.

As per Notification no. 14/2022-Central Tax (Rate), supply of peppermint essential oil (Mentha piperita), Spearmint oil, Water mint oil, horsemint oil and bergamot oil by any unregistered person to registered persons, attracts GST on a reverse charge basis. It applies to sales made on or after 1st January 2023.

Lastly, the government has added an explanation to clarify the exemption of renting residential dwellings to registered persons. Notification no. 15/2022-Central Tax (Rate) mentions that exemption will apply if the tenant, who is also a proprietor, uses such rented place as their own residence and on their own account. In other words, the expense must not be charged to the proprietor’s account.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in

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