GST Rate Reduced from 18% to 12% in January 2018: Complete List of Eight Goods
At its meeting on 18 January 2018, the GST Council recommended reducing the GST rate from 18% to 12% for eight categories of goods, including sugar-boiled confectionery, bottled drinking water, biodiesel, specified bio-pesticides and irrigation equipment.
Goods recommended for GST reduction from 18% to 12%
The following table preserves all eight entries in the original January 2018 list. HSN chapter and heading references are historical identifiers from that list; product classification and eligibility must be checked against the applicable tariff and rate-notification wording.
| S. No. | HSN chapter / heading / tariff item | Goods described in the January 2018 recommendation |
|---|---|---|
| 1 | 1704 | Sugar-boiled confectionery |
| 2 | 2201 | Drinking water packed in 20-litre bottles |
| 3 | 2809 | Fertilizer grade Phosphoric acid |
| 4 | 29 or 38 | Bio-diesel |
| 5 | 39 | The following Bio-pesticides Bacillus thuringiensis var. israelensis Bacillus thuringiensis var. kurstaki Bacillus thuringiensis var. galleriae Bacillus sphaericus Trichoderma viride Trichoderma harzianum Pseudomonas fluorescens Beauveria bassiana NPV of Helicoverpa armigera NPV of Spodoptera litura Neem based pesticides Cymbopogon |
| 6 | 4418 | Bamboo wood building joinery |
| 7 | 8424 | Drip irrigation system including laterals, sprinklers |
| 8 | 8424 | Mechanical Sprayer |
Legal basis for GST rate changes in India
Article 279A of the Constitution of India
Article 279A establishes the GST Council. Under Article 279A(4), the Council makes recommendations to the Union and States on matters including goods and services that may be taxed or exempted and GST rates. A Council recommendation is not, by itself, a substitute for a legally operative rate notification.
Section 9(1) of the Central Goods and Services Tax Act, 2017
Section 9(1) provides for levy and collection of central GST on intra-State supplies of goods or services (subject to statutory exclusions) at rates notified by the Central Government on the Council's recommendations. For a typical taxable intra-State supply, the corresponding State GST law must also be considered.
Section 5(1) of the Integrated Goods and Services Tax Act, 2017
Section 5(1) provides for levy and collection of integrated GST on inter-State supplies, at notified rates subject to the Act. The total IGST rate should not be confused with the central GST component of an intra-State supply.
Section 11 of the CGST Act and Section 6 of the IGST Act
These provisions concern exemption powers, including exemptions subject to specified conditions. An exemption is different from a reduction of the taxable rate; both require checking the applicable legal instrument.
Section 15 and classification
Section 15 of the CGST Act governs valuation of taxable supplies. HSN classification generally follows the applicable customs tariff and GST notification descriptions; a broad chapter number alone does not guarantee that every product within that chapter receives the same rate.
How to determine the rate applicable to a supply
- Identify the goods precisely, including composition, use, packaging and applicable HSN classification.
- Check the relevant CGST, SGST/UTGST or IGST rate notification, including subsequent amendments and any entry-specific conditions.
- Confirm the effective date and applicable time-of-supply provisions; a historical Council recommendation should not be applied automatically to a current invoice.
- Review any later GST rate rationalisation, exemptions or clarifications affecting the product.
The original article anticipated that the Council's recommendation would require Gazette notification for legal effect. That distinction remains important: the applicable law is determined by enacted provisions and effective notifications, not by the meeting recommendation alone.