“New CGST Exemption: Millet Flour Food Preparations Added to Nil Rated Goods List”
Simplified Explanation of Notification No. 18/2023-Central Tax (Rate) – Addition to List of Nil Rated Goods
Heading: Addition of Millet Flour Food Preparation to List of Nil Rated Goods
Purpose of the Notification:
This notification updates the list of goods that are exempt from Central Goods and Services Tax (CGST), commonly referred to as “nil rated goods.” This means that these goods are not subject to CGST.
Key Points of the Notification:
1. Addition to Nil Rated Goods List
- Amendment to Notification No. 2/2017-Central Tax (Rate):
- Previous Notification: Notification No. 2/2017-Central Tax (Rate) outlines various goods that are exempt from CGST.
- New Amendment: The latest notification adds a new entry to this list.
2. New Entry Details
- Newly Added Item:
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- S. No. 94A: Food preparation of millet flour, in powder form, containing at least 70% millets by weight, other than pre-packaged and labelled.
- Description: This refers to food products made from millet flour, which are in powder form and have a millet content of at least 70% by weight. These products are now added to the list of goods exempt from CGST.
Example:
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- Scenario: Suppose a manufacturer produces millet flour-based food preparations that are in powder form and contain at least 70% millets by weight. These products are not pre-packaged and labelled.
- Impact of the Amendment: Starting from October 20, 2023, these millet flour preparations will be classified as nil rated under CGST. As a result, the manufacturer will not have to pay CGST on these products, making them effectively exempt from CGST.
3. Effective Date
- Date of Effect:
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- The changes are effective from October 20, 2023.
Example:
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- If a manufacturer sells millet flour-based food preparations on or after October 20, 2023, these products will be exempt from CGST under the new rule.
Summary:
The notification updates the list of nil rated goods by adding a specific category: food preparations made from millet flour, which must contain at least 70% millets by weight and be in powder form. This addition means these products will be exempt from CGST starting October 20, 2023. This change is aimed at supporting the consumption and production of millet-based foods.