The Central Board of Indirect Taxes and Customs ( CBIC ), vide circular no. 235/29/2024-GST dated 11th October 2024, has issued a clarification on the Goods and Services Tax ( GST ) rates and classification of various goods, following the recommendations made during the 54th GST Council meeting held on September 9, 2024, in New Delhi.
There had been some confusion regarding the classification and GST rates applicable to savoury or salted extruded snack pellets. Specifically, the question was whether these products should be classified under HS 2106 as Namkeens, which attract a 12% GST.
To address this, the GST Council clarified that, effective from October 10, 2024, extruded or expanded savoury products, excluding un-fried or uncooked snack pellets, will be classified under HS 1905 90 30 and subject to a 12% GST. This brings these products in line with namkeens, bhujia, and other similar edible preparations.
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It is important to note that the 12% GST rate is only applicable from October 10, 2024, onward. For any period prior to this, the applicable GST rate remains 18%. Un-fried or uncooked snack pellets, regardless of the name or method of production, will continue to attract a 5% GST.
Another clarification was needed to the GST classification of Roof Mounted Package Unit (RMPU) air conditioners used in railways. The question was whether these should be classified under HS 8415, which attracts a 28% GST, or under HS 8607, which applies to parts of railways and carries an 18% GST rate.
CBIC clarified that RMPU air conditioners fall under HS 8415, as air conditioning machines are explicitly excluded from the definition of “parts” under HS 8607, based on the section notes of the Customs Tariff Act, 1975. Therefore, RMPU air conditioners used in railways will attract a GST rate of 28%.
Clarification on GST Rate for Car and Motorcycle Seats
Representations were also received regarding the classification and GST rate for seats designed for two-wheelers and four-wheeled vehicles. According to the CBIC clarification, seats for two-wheelers (classified under HS 8714) attract a GST rate of 28%. This classification is supported by the explanatory notes for HS 9401, which exclude two-wheeler seats from its scope and instead place them under HS 8714.
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As for car seats, they are classified under HS 9401, which includes all seats for motor vehicles, including those convertible into beds. Car seats have historically been subject to an 18% GST, as per S. No. 435A of Schedule III of notification No. 1/2017-Central Tax (Rate). However, the GST Council has now recommended bringing car seats in line with motorcycle seats in terms of GST rate.
As of October 10, 2024, car seats classified under HS 9401 will attract a higher GST rate of 28%, as per the revised Schedule IV of the notification. This change, like that for extruded food products, will be applied prospectively, with the previous 18% rate applying to past periods.
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This circular from the CBIC offers clarity on GST rates for several goods, minimising confusion for businesses and tax authorities. From October 10, 2024, extruded food products will be subject to a 12% GST, while RMPU air conditioning units used in railways will attract a 28% GST under HS 8415. Additionally, seats for both motorcycles and cars will now be taxed at 28%, ensuring consistent treatment across vehicle categories.
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