Notification No. 3/2023-Central Tax: Updates to CGST Rate Schedule

Simplified Explanation of Notification No. 3/2023-Central Tax (Rate)

Purpose: This notification updates the CGST rate schedule for various goods by making changes to the classification and tax rates of certain items.

Key Points:

1. Amendment Overview:
   • This notification modifies Notification No. 1/2017-Central Tax (Rate) which details the CGST rates for different goods.
2. Specific Changes:
   • Change in Schedule I (2.5% Rate):
     • Current Entry:
       • The previous entry for S. No. 91A included “Jaggery (gur)” and “Khandsari Sugar.”
     • Revised Entry:
       • The new entry includes:
         • “Jaggery of all types (including Cane Jaggery, Palmyra Jaggery), pre-packaged and labelled.”
         • “Khandsari Sugar, pre-packaged and labelled.”
         • “Rab, pre-packaged and labelled.”
       • Effective Date: March 1, 2023.
     • Addition to Schedule II (6% Rate):
       • New Entry:
         • No. 186A:
           • Item: Pencil sharpeners.
         • Effective Date: March 1, 2023.
       • Modification in Schedule III (9% Rate):
         • Current Entry:
           • No. 302A lists items with a 9% rate.
         • Revised Entry:
           • Adds the clarification: “[other than pencil sharpeners]”
         • Effective Date: March 1, 2023.

3. Examples:
4. Jaggery and Rab:
   • Before March 1, 2023:
     • Jaggery and Khandsari Sugar were taxed at a different rate, not specifically mentioning pre-packaged and labelled goods.
   • After March 1, 2023:
     • Jaggery (including Cane and Palmyra) and Khandsari Sugar, when pre-packaged and labelled, are taxed at 2.5%.
     • Rab, when pre-packaged and labelled, is also taxed at 2.5%.

2. Pencil Sharpeners:

• Before March 1, 2023:
  • Pencil sharpeners were not listed separately.
• After March 1, 2023:
  • Pencil sharpeners are now included in Schedule II at a 6% tax rate.

3. Items Excluded from 9% Rate:

• Before March 1, 2023:
  • Certain items listed under S. No. 302A were taxed at 9%.
• After March 1, 2023:
  • Pencil sharpeners are specifically excluded from this 9% tax rate.