CBIC re-classify Rab GST Rate

Circular No. 189/01/2023-GST issued by the Central Board of Indirect Taxes and Customs (CBIC) on January 13, 2022 provides clarification regarding levy of GST on various goods. It is based on the recommendations of the 48th GST Council Meeting. The CBIC has also issued an announcement for the classification of Rab in this notification. The details of the announcements are discussed in this article.

What is Rab?

A request for clarification on the categorization of “Rab” has been received by the government.

According to the U.P. Rab (Movement Control Order), 1967, “Rab” defines “massecuite formed by concentrating sugarcane juice on open pan furnaces, and includes Rab Galawat and Rab Salawat, but excludes khandsari molasses or lauta gur.”

Rab, although being a sugarcane product, occurs in semi-solid/liquid form and is hence not covered by heading 1701.

Krishi Utpadan Mandi Samiti vs. M/s Shankar Industries and others

In its decision in Krishi Utpadan Mandi Samiti vs. M/s Shankar Industries and others [1993 SCR (1)1037], the Supreme Court separated Rab from Molasses.

As a result, Rab, which can be distinguished from molasses, cannot be classified under category 1703.

CBIC Classifies Rab under 1702

Considering the above details, the CBIC issued a notification and classified it under the heading 1702. Heading 1702 under HSN Codes also contains Other sugars, including chemically pure lactose, maltose, glucose, and fructose, in solid form; sugar syrups not containing added flavouring or colouring matter, artificial honey, whether or not mixed with natural honey; caramel Lactose and lactose syrup.

Impact of Classification of Rab under Heading 1702

As a result of the reclassification of Rab under heading 1702, Rab will now attract 18% GST Rate which is as per the S. No. 11 in Schedule III of notification No. 1/2017-Central

Tax (Rate), dated the 28th June, 2017.