No GST on Papad – The CBIC(Central Board of Indirect Taxes and Customs) has made it clear. In the recent tweet, the CBIC declared that no GST is levied on Papad whatever its shape, name, or form is. Let us discuss this update in detail.
What is GST?
GST stands for Goods and Service Tax. It is a unified indirect tax that is implemented from 1st July 2017 in India.
Fundamentally, the indirect tax is a tax levied on goods and services rather than income and profits.
Thus, The government collects the tax on the sales made by businesses and businesses collect the tax from their customers indirectly while charging the same tax on Invoices.
Also, The Goods and Services Tax replaced a whole host of excise duties, service tax, surcharges, and cesses, sales tax, state value-added tax (VAT), and other taxes with one single tax.
Harmonized System of Nomenclature code (HSN Code) is used for classifying goods under GST. World’s Customs Organization (WCO) issues HSN Codes.
GST on Papad depending on the Shape
Harsh Goenka, an industrialist, regularly publishes shocking things on his Twitter. But his recent post on papad regarding GST has aroused some debate, drawing a reply from the Central Board of Indirect Taxes and Customs that is intervening to correct him. Goenka’s tweet had claimed that round papad was exempt from GST while the square variant was not.
GST on Papad
Responding to the post, the Central Board of Indirect Taxes and Customs, which is responsible for indirect taxation in the country, clarified through its official handle, “Papad, by whatever name is known, is exempt from GST vide Entry No. 96 of GST notification No.2/2017-CT(R). This entry does not distinguish based on the shape of the papad. This notification is available at http://cbic.gov.in.”
Read the official tweet by CBIC – CBIC on Twitter
What is HSN Code or HS Codes for Papads?
The HSN Code for Papad is 1905.
| Bread, Pastry, Cakes, Biscuits, And Other Bakers’ Wares, Whether Or Not Containing Cocoa; Communion Wafers, Empty Cachets Of A Kind Suitable For Pharmaceutical Use, Sealing Wafers, Rice Paper, And Similar Products |
The HS Code for Papad is 19059040.
| PAPAD, Products Include: Urad Papad, Appalam, Lijjat Papad, Provision Items, Fryums |
Find the list of HSN Code at – List of HSN Code with Tax Rates
AAR Ruling for GST on Papad
It is important to note that earlier in 2017 AAR ruled The product ‘Un-fried Fryums’ was manufactured and supplied by M/s. Sonal Product (GSTIN 24AGPPK7290R1ZF) is classifiable under Tariff Item 2106 90 99 of the First Schedule to the Customs Tariff Act, 1975.
Goods and Service Tax rate of 18% (CGST 9% + GGST 9% or IGST 18%) is applicable to the product ‘Un-fried Fryums’ as per Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended, issued under the CGST Act, 2017 and Notification No. 1/2017-State Tax (Rate) dated 30.06.2017, as amended, issued under the GGST Act, 2017 of IGST Act, 2017.
If you want any other guidance relating to the GST Registration, and GST Return Filing, please feel free to talk to our business advisors at 8881-069-069.
Download E-Startup Mobile App and Never miss the latest updates narrating to your business.