Reduction of GST rate on Molasses from 28% to 5%

Background:

Earlier, the GST Council in its 52nd Meeting, interalia recommended to reduce GST rate on Molasses from 28% to 5%.

Notification:

Now, the CBIC vide Notification No. 17/2023 Central Tax (Rate) dated October 19, 2023, has inserted Sl. No. 92A in in Schedule I of the Notification No. 1/2017 Central Tax (Rate) dated June 28, 2017 which will be read as follows:

Further, the CBIC has omitted Sl. No. 1 of Schedule IV of the Notification which was as follows:

Impact:

This step will increase liquidity with mills and enable faster clearance of cane dues to sugarcane farmers. This will also lead to reduction in cost for manufacture of cattle feed as molasses is also an ingredient in its manufacture.

The Notification will come into force on October 20, 2023.

Similar notifications have been passed under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”).

CGST (Rate) Notification: https://taxinformation.cbic.gov.in/view-pdf/1009898/ENG/Notifications

IGST (Rate) Notification: https://taxinformation.cbic.gov.in/view-pdf/1009907/ENG/Notifications

UTGST (Rate) Notification: https://taxinformation.cbic.gov.in/view-pdf/1009916/ENG/Notifications

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