Clarification on GST Rates & Other issues-Circular dated 14.02.2025!

In pursuance of the recommendations made by the GST Council in its 55th meeting held on 21st December 2024 at Jaisalmer, the CBIC has issued Circular No. 247/04/2025-GST dated 14.02.2025 to provide necessary clarifications on various aspects of GST classification, amendments and applicable tax rates.

Let’s understand the clarification in detail!

Circular No. 247/04/2025-GST dated 14.02.2025:

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

(TAX RESEARCH UNIT)

F. No. 19354/2/2025-TO(TRU-II)-CBEC

New Delhi: 14.02.2025

Circular No. 247/04/2025-GST

To,

The Principal Chief Commissioners/ Principal Directors General,

The Chief Commissioners/ Directors General,

The Principal Commissioners/ Commissioners of Central Excise Central Tax

Subject: Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 55th meeting held on 21st December 2024, at Jaisalmer -reg.

Based on the recommendations of the GST Council in its 55th meeting held on 21st December 2024, at Jaisalmer, in the exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017, the Board hereby clarifies the following issues through this circular for uniformity in their implementation:

1. Clarification regarding classification and GST rate on pepper of genus Piper:

1.1 References were received seeking clarification on the classification and applicable GST rate on the supply of pepper of the genus Piper and whether the supply of dried pepper by an agriculturist is exempt from GST.

1.2 Based on the recommendations of the GST Council in its 55th meeting, it is hereby clarified that pepper of genus Piper, whether green (fresh), white or black, is covered under HS 0904 and attracts 5% GST vide S. No. 38 of Schedule I of notification No. 1/2017-Central Tax (Rate) dated the 28th June 2017.

1.3 As regards the applicability of GST on the supply of dried pepper by an agriculturist from their plantations, Section 23 (1) (b) of the CGST Act provides that an agriculturist, as defined in Section 2(7) of the CGST Act, to the extent of supply of produce out of cultivation of land is not liable to take registration.

1.4 As per the recommendation of the GST Council, it is hereby clarified that an agriculturist supplying dried pepper is not liable to be registered under Section 23(1) of the CGST Act is exempt from GST.

2. Clarification regarding raisins supplied by an agriculturist:

2.1 Reference was received seeking clarification on the applicable rate on the supply of raisins by agriculturists.

2.2 As per the recommendation of the GST Council, it is hereby clarified that an agriculturist supplying raisins is not liable to be registered under Section 23(1) of the CGST Act is exempt from GST.

3. Clarification on GST rate on ready-to-eat popcorn:

3.1 Representations were received seeking clarification regarding appropriate classification and applicable GST rate on ready-to-eat popcorn.

3.2 On the recommendation of the Council, it is hereby clarified that ready-to-eat popcorn which is mixed with salt and spices are classifiable under HS 2106 90 99. It is also hereby clarified that such ready-to-eat popcorn mixed with salt and spices classifiable under HS 2106 90 99 attracts 5% GST if other than pre-packaged and labelled vide S. No. 101A of Schedule I of notification No. 1/2017-Central Tax (Rate) dated the 28th June 2017 and 12% GST if sold as packaged and labelled vide S. No. 46 of Schedule I of notification No. 1/2017-Central Tax (Rate) dated the 28th June 2017, as it has the essential character of namkeens. However, when the popcorn is mixed with sugar thereby changing its character to sugar confectionary (e.g. caramel popcorn), it would be classifiable under HS 1704 90 90 attracting 18% GST vide S. No. 12 of Schedule III of notification No. 1/2017-Central Tax (Rate) dated the 28th June 2017

3.3 Further, given the prevailing genuine doubts regarding the applicability of the GST rate on ready to eat popcorn mixed with salt and spices, as recommended by the Council the issue for the past period up to 14.2.2025 is hereby regularized on an 'as is where is' basis.

4. Fly ash based Autoclaved Aerated Concrete Blocks:

4.1 References were received regarding the classification and applicable GST rate on autoclaved aerated concrete (AAC) blocks containing at least 50% fly ash content as raw material.

4.2 Fly ash bricks, fly ash aggregates and fly ash blocks classifiable under HS 6815 attract 12% GST vide S. No. 176B of Schedule II of notification No.1/2017-Central Tax (Rate) dated 28.06.2017. Articles of cement, of concrete or of artificial stone, whether or not reinforced classifiable under HS 6810 attract 18% GST vide S. No. 181 of Schedule III of notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.

4.3 As per the recommendation of the GST Council, it is hereby clarified that autoclaved aerated concrete (AAC) blocks containing more than 50% fly ash content will fall under HS 6815 and attract 12% GST.

5. Effective date of amended entry regarding ground clearance:

5.1 Representations were received that there are different views in some jurisdictions regarding the effective date of amended entry 52B in notification No. 1/2017-Compensation Cess (Rate) dated 28.06.2017.

5.2 Prior to the 50th GST Council meeting, vide entry at S. No. 52B in the notification No. 01/2017- Compensation Cess (Rate) dated 28.06.2017, motor vehicles of engine capacity exceeding 1500 cc, popularly known as SUVs, including utility vehicles attracted 22% Compensation Cess.

5.3 Following the 50th GST Council meeting, vide notification No. 03/2023- Compensation Cess (Rate) dated 26.07.2023, entry 52B was substituted to provide that the cess will be applicable to all motor vehicles known as utility vehicles by whatever name called, with engine capacity exceeding 1500cc, length exceeding 4000mm and ground clearance of 170mm and above. Further, a new explanation was added that ground clearance means ground clearance in unladen conditions.

5.3 As per the recommendation of the GST Council, it is hereby clarified that the amendment carried out vide notification No. 03/2023- Compensation Cess (Rate) dated 26.07.2023 will apply on or after 26.7.2023.

6. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.

(Limatula Yaden)

Joint Secretary (TRU-I)

Key Highlights

Following GST rates and other points are confirmed in this circular:

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Conclusion

The clarifications issued through Circular No. 247/04/2025-GST provide much-needed guidance on the classification and applicable GST rates for various goods based on the recommendations of the 55th GST Council meeting. These updates ensure uniformity in tax implementation and address industry concerns regarding the taxation of agricultural produce, processed food items, and construction materials. By providing clear directives on tax liabilities and exemptions, the circular enhances compliance and reduces ambiguities in GST application. 

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