Key Changes in GST Rates: Notification No. 2/2024-Central Tax (Rate)

Simplified Explanation of Notification No. 2/2024-Central Tax (Rate)

**1. Notification Overview:

This notification updates the GST rates on certain goods by amending the earlier notification (No. 1/2017-Central Tax (Rate)).

**2. Key Amendments:

**A. Amendments in Schedule II – 6% GST Rate:

• Addition of New Items:
  • Serial Number 121A: Cartons, boxes, and cases made of corrugated or non-corrugated paper or paperboard will now be taxed at 6% GST.
    • Example: A carton box made of corrugated paper for shipping goods will attract a 6% GST.
  • Serial Number 180A: Milk cans made of iron, steel, or aluminum are now subject to a 6% GST rate.
    • Example:An aluminum milk can used for storing milk will have a 6% GST applied.
  • Serial Number 183A: Solar cookers are now included at a 6% GST rate.
    • Example: A solar cooker purchased for outdoor cooking will be taxed at 6%.
  • Serial Number 199: Parts of brooders (used in poultry farming) are now also taxed at 6%.
    • Example: A replacement part for a poultry brooder will be taxed at 6%.

**B. Amendments in Schedule III – 9% GST Rate:

• Revised Entries:
  • Serial Number 153A: Goods under HSN code 4819 (excluding those specified as cartons, boxes, and cases) are now taxed at 9% GST.
    • Example: Paper products other than boxes and cartons will be taxed at 9%.
  • Serial Number 224: The GST on certain equipment is now specified as 9%, excluding milk cans made of iron or steel.
    • Example: Equipment like industrial tools will be taxed at 9%, but milk cans made of iron or steel are excluded.
  • Serial Number 235: The GST rate of 9% for wood-burning stoves now includes solar cookers.
    • Example: A wood-burning stove and a solar cooker will both be taxed at 9%.
  • Serial Number 273: Boxes are taxed at 9%, except for aluminum milk cans.
    • Example: A wooden box will be taxed at 9%, but an aluminum milk can will be excluded.
  • Serial Number 275A: Utensils now include aluminum milk cans at a 9% GST rate.
    • Example:Aluminum milk cans are taxed at 9%, along with other kitchen utensils.
  • Serial Number 378A: Domestic use items are taxed at 9%, except for solar cookers.
    • Example: Household items like stoves are taxed at 9%, but solar cookers are excluded.

**C. Explanation Added:

• Packaging Rule: Agricultural produce packaged in quantities larger than 25 kilograms or 25 liters is no longer considered “pre-packaged and labelled” for GST purposes, despite existing rules under the Legal Metrology Act.
  • Example: A 30-kilogram bag of rice will not be subject to the same GST labeling rules as smaller, pre-packaged items.

**3. Effective Date:

• These changes will be effective from July 15, 2024.

**4. Summary:

• 6% GST Rate: Applied to new items like paper cartons, milk cans, and solar cookers.
• 9% GST Rate: Applied with revised specifications on goods like wood-burning stoves and aluminum milk cans.
• New Packaging Rule: Larger packages of agricultural produce are exempt from certain GST labeling requirements.