Simplified Explanation of Notification No. 12/2022-Central Tax (Rate)
Purpose: This notification updates the Central Goods and Services Tax (CGST) rate schedule for various goods, effective from January 1, 2023. It revises the tax rates and descriptions for certain goods.
Key Points:
- Amendments in Schedule I – 2.5% Rate:
- Item 102A:
- Before January 1, 2023:
- Covered a broad category of ethyl alcohol.
- After January 1, 2023:
- Now specifically refers to ethyl alcohol supplied to Oil Marketing Companies or Petroleum refineries for blending with petrol (motor spirit).
- Item 103A:
- Before January 1, 2023:
- Included bran, sharps, and residues from cereals and leguminous plants.
- After January 1, 2023:
- The updated entry excludes various types of feed and by-products like aquatic feed (shrimp and prawn feed), poultry feed, cattle feed, husk of pulses, and concentrates such as chuni or churi.
- Before January 1, 2023:
- Before January 1, 2023:
- Item 102A:
- Amendments in Schedule II – 6% Rate:
- Item 48:
- Before January 1, 2023:
- Covered fruit pulp or fruit juice based drinks.
- After January 1, 2023:
- Excludes carbonated beverages with fruit juice or fruit drinks, focusing on non-carbonated fruit-based drinks.
- Item 180:
- Before January 1, 2023:
- Covered a range of boxes, including mathematical and geometry boxes.
- After January 1, 2023:
- Specifically includes mathematical boxes, geometry boxes, and colour boxes.
- Before January 1, 2023:
- Before January 1, 2023:
- Item 48:
- Amendment in Schedule III – 9% Rate:
- Item 25:
- Before January 1, 2023:
- Included ethyl alcohol and other spirits, whether denatured or not.
- After January 1, 2023:
- Excludes ethyl alcohol supplied to Oil Marketing Companies or Petroleum refineries for blending with petrol.
- Before January 1, 2023:
- Item 25:
Effective Date:
- January 1, 2023
What This Means:
- Revised Definitions and Exclusions:
- Ethyl Alcohol for Blending: Only ethyl alcohol used for blending with petrol is now taxed at a 2.5% rate, while other ethyl alcohol is taxed differently.
- Feed and By-products: The exemption for feed products is refined, with specific exclusions for various types of feed and by-products.
- Fruit Drinks: Tax rates now differentiate between carbonated fruit beverages and non-carbonated fruit drinks.
- Clarification on Goods:
- Mathematical and Geometry Boxes: These items are clearly specified, ensuring clarity on their GST rate.
- Ethyl Alcohol Exclusion: Denatured ethyl alcohol used for blending with petrol is excluded from the 9% rate.
Example:
Scenario:
- Before January 1, 2023:
- Ethyl alcohol purchased for any purpose would be subject to a 2.5% rate.
- Fruit pulp-based drinks, including carbonated fruit beverages, were included under a 6% rate.
- After January 1, 2023:
- Ethyl Alcohol: If you are a petroleum refinery buying ethyl alcohol for blending with petrol, it is now taxed at 2.5%. Other uses of ethyl alcohol will face different tax rates.
- Fruit Drinks: Non-carbonated fruit drinks are taxed at 6%, while carbonated fruit beverages are excluded from this rate.