Amendments to CGST Exempt Goods List: Notification No. 7/2022-Central Tax (Rate)

Simplified Explanation of Notification No. 7/2022-Central Tax (Rate)

Heading: Amendments to CGST Exempt Goods List

Overview:

Notification No. 7/2022-Central Tax (Rate) updates the list of goods exempt from Central Goods and Services Tax (CGST) by amending the previous Notification No. 2/2017-Central Tax (Rate). These changes clarify which goods are exempt from CGST and specify new conditions related to packaging and labeling.

Key Details:

1. Amendment Overview:

1. • Previous Notification: Notification No. 2/2017-Central Tax (Rate) listed various goods that were exempt from CGST.
   • Action Taken: Notification No. 7/2022 revises these exemptions and clarifies the conditions related to the packaging and labeling of exempt goods.

2. Specific Changes:

1. • General Exemption Condition: For various entries, the exemption now specifically applies to goods “other than pre-packaged and labelled“.
   • Updated Entries:
     • Curd, Lassi, Butter Milk: The exemption applies only to items “other than pre-packaged and labelled“.
     • Jaggery and Khandsari Sugar: Exempt only if “pre-packaged and labelled“.
     • Murki: Updated to “other than pre-packaged and labelled“.
   • Omissions: Certain entries and serial numbers related to exemptions are removed from the list.
   • New Definition: “Pre-packaged and labelled” refers to commodities packaged and labeled as defined under the Legal Metrology Act, 2009.

3. Effective Date:

1. • Implementation Date: The updated exemptions and definitions apply from July 18, 2022.

Example:

• Before the Amendment:

• • Curd and Butter Milk: Exempt from CGST without regard to packaging.

• After the Amendment:

• • Curd and Butter Milk: Exempt from CGST only if they are “not pre-packaged and labelled“. If they are pre-packaged and labelled, they will now be subject to CGST.

• Jaggery: Previously, jaggery might have been exempt regardless of packaging. Post-amendment, only non-pre-packaged and non-labelled jaggery is exempt.

Purpose:

• Clarity on Packaging: The amendment specifies that only goods that are not pre-packaged and labelled are eligible for CGST exemption. This ensures that tax exemptions are clear and consistently applied.
• Regulatory Compliance: It updates businesses on the new conditions and definitions, aiding in accurate tax reporting and compliance.

This notification aims to streamline the application