21 Sep 2019Posted By: Mudit Handa


37th GST Council Meeting: Reduction in GST rate on goods

The 37th GST Council meeting had taken place in Goa on 20th September 2019. The meeting was presided by the honorable Finance Minister of India Smt. Nirmala Sitharaman. There were a number of expectations from the traders having GST registration. 

Accordingly, the GST Council has passed noteworthy decisions in the interest of these traders. The council has reduced the GST rate on several goods. The Council has also exempt IGST liability on several items for helping various exporters having GST registration, for the purpose of export promotion.

Here, we will discuss the important changes made in the GST rate on goods.

 

#1. Reduction of GST rate on goods

The GST rate has been drastically reduced by the GST council on a large number of goods, in the interest of the traders having GST registration. Here is the list of all goods where GST rate is reduced:

  • GST rate is reduced from 18% to 12% on the parts of Slide Fasteners (zips).

  • GST rate has been slashed from 18% to 5% on the Marine Fuel (0.5% Fuel Oil). 

  • Wet Grinders, consisting of stone as a grinder, have seen GST rate reduction from 12% to 5%.

  • Cut & polished semi-precious stones have witnessed GST rate cut from 3% to 0.25%.

  • GST rate is reduced to 5% on specific goods for petroleum operations under the Hydrocarbon Exploration Licensing Policy (HELP) of the government.


#2. Reduction of GST rate to Nil

The GST council has reduced the GST rate from 5% to Nil on the following goods:-

  • Dried tamarinds (Imli)

  • Eco-friendly Plates & cups prepared from leaves, flowers or barks.


#3. GST exempt on goods

Besides, the 37th GST council meeting has also provided relief to many traders having GST registration by exempting certain goods from GST. Here’s the list of all goods where GST is exempt: 

  • Import of certain defense-related equipment being entirely manufactured outside India, up till 2024.

  • Supply of goods & services to FIFA and specified bodies for holding the Under-17 Women’s Football World Cup in India.

  • Supply of goods & services to the Food and Agriculture Organisation (FAO) for noteworthy projects undertaken in India.


#4. Exemption of IGST liability for Export promotion

The GST council has also provided relief to many exporters having GST registration by exempting IGST liability on several goods, which are listed as below:

  • Supplying as well as importing of solid Silver and Platinum by certain nominated agencies to the exporters for the export of Jewellery.
  • Diamond India Limited (DIL) has been included in the list of nominated agencies for IGST exemption on the import of Gold, Silver, and Platinum. These will be supplied at Nil GST rate to exporters of Jewellery.

#5. Hike in GST on goods

Besides, the GST rates have been increased on a few goods by the GST council. Here’s the list of goods where GST rates have been increased:

  • From 5% to 12% on the railway wagons, coaches, rolling stock. The accumulated ITC won’t be available on these goods. 
  • This step is taken is to resolve the issue of accumulation of utilized ITC of suppliers of these goods, i.e. inverted tax structure.
  • GST is raised from 18% to 28% on caffeinated beverages +12% GST compensation cess. Hence, soft drinks will become too costlier now.

#6. Miscellaneous changes

Apart from that, the GST council has made some other changes in the GST rate, which are as follows:

  • The GST compensation cess is now fixed at 1% for 9 seater petrol and 3% for diesel vehicles of engine capacity of 1500 cc in case of diesel and 1200 cc in case of petrol, and length up to 4000mm. 

  • GST compensation cess for vehicles with above specifications, but 10 to 13 seater capacity shall be reduced from the current rate of 15% to:-

  1. 1% for the petrol variant and 
  2. 3% for the diesel variants.

These are some of the changes made in the GST rate of goods at the 37th GST Council Meeting.

To know further GST rate changes, refer to th 

If you need any further assistance regarding GST registration, please feel free to contact our business advisor at 8881-069-069.

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