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Classification of 'Kannipukayila' under HSN Code 2401: 5% GST rate applies The ruling confirmed that sun-cured 'Tobacco leaves' known as 'Kannipukayila' fall under HSN Code 2401 and are subject to a 5% GST rate (2.5% CGST + 2.5% ...
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Classification of "Kannipukayila" under HSN Code 2401: 5% GST rate applies
The ruling confirmed that sun-cured "Tobacco leaves" known as "Kannipukayila" fall under HSN Code 2401 and are subject to a 5% GST rate (2.5% CGST + 2.5% SGST) as per Notification No. 01/2017 - Central Tax (Rate) dated 28-06-2017. It was clarified that a tax invoice must specify the tax amount charged for taxable goods or services, and GST liability should be based on the taxable value, whether as a lump-sum price or after deduction of notional GST. Non-compliance with correct tax rates may result in penal consequences as per the law.
Issues: 1. Applicability of HSN code to sun-cured "Tobacco leaves" known as "Kannipukayila" purchased from specific areas. 2. Determination of tax rate for "Kannipukayila" under specific descriptions. 3. Permissibility of charging lump-sum price in invoice without specifying GST quantum. 4. Determination of GST liability on lump-sum price. 5. Penal consequences if tax rate paid is lower than confirmed liability.
Analysis: 1. The applicant sought clarification on the applicable HSN code for sun-cured "Tobacco leaves" known as "Kannipukayila" purchased from specific areas. The ruling confirmed that sun-cured tobacco leaves fall under HSN Code 2401.
2. Regarding the tax rate applicable to "Kannipukayila," it was determined that tobacco leaves falling under heading no. 2401 are subject to 5% GST (2.5% CGST + 2.5% SGST) as per Notification No. 01/2017 - Central Tax (Rate) dated 28-06-2017.
3. The query about charging a lump-sum price in the invoice without specifying the GST amount was addressed by referring to Rule 46 of SGST Kerala Rules, which mandates that a tax invoice issued by a registered person must contain particulars of the tax amount charged for taxable goods or services.
4. The ruling clarified that GST liability is to be determined based on the taxable value of the supply of goods or services, emphasizing that tax should be collected on the taxable value, whether as a lump-sum price or after deduction of notional GST.
5. In case the applicant pays tax at a lower rate (5%) but the liability is confirmed at a higher rate (28%), the ruling indicated that penal consequences would be governed by the provisions of the prevailing law. The decision highlighted the importance of complying with the correct tax rates to avoid potential penalties or consequences.
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