GST Rate on Cane Sugar in Central Excise Tariff
First of all, will see what is refined beet and cane sugar. This will help to know more about the subject matter. In simple words, Cane sugar is a sugar that is obtained from sugar cane.
There are many categories of sugar since past tax law i.e central excise law. As per the central excise tariff heading chapter 17 is meant for Sugar and sugar confectionery. Below are the different categories of sugar.
b) khandsari sugar
This means the sugar in the manufacture of which neither a vacuum pan nor a vacuum evaporator is employed.
c) Palmyra sugar
This means sugar manufactured from the juice of the palmyra palm or from jaggery obtained by boiling the juice of the palmyra palm.
d) Raw sugar
This means sugar whose content of sucrose by weight, in the dry state, corresponds to a polarimeter reading of fewer than 99 .5 degrees.
e) Cane sugar
Cane sugar is a sugar obtained without centrifugation, whose content of sucrose by weight, in the dry state, corresponds to a polarimeter reading of 69° or more but less than 93°.
The product contains only natural anhedral microcrystals, of rough shape, not visible to the naked eye, which are bordered by remains of molasses and other constituents of sugar cane.
Refine beet and cane sugar in GST
The government Vide S. No. 91 of schedule I of notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, 5% GST rate has been approved on all types of beet and cane sugar falling under heading 1701.
Now the doubts have arrived due to S. No. 32 A of the Schedule II of notification No. 1/2017-Central Tax (Rate) dt. 28.06.2017.
As per this notification, a 12% GST rate is applicable on “All goods, falling under tariff items 1701 91 and 1701 99 including refined sugar containing added flavoring or coloring matter, sugar cubes (other than those which attract 5% or Nil GST)”.
Therefore confusion arises in taxpayers’ minds, about whether refined sugar is falling under the 5% or under 12% category.
In view of this, the government has come with release of a circular to clarify this confusion. This circular has reference vide Circular No.52/26/2018-GST dt.09th August 2018. Clarification as per the circular is as below:
It is to clarify that by virtue of specific exclusion in S. No. 32 A, any sugar that falls under 5% category [at the said S. No. 91 of schedule I of notification No.1/2017-Central Tax (Rate) dated 28.06.2017] gets excluded from the S. No. 32 A of Schedule II.
As all kinds of beet and cane sugar falling under heading 1701 are covered by the said entry at S. No. 91 of Schedule I, these would get excluded from S. No. 32 A of Schedule II, and thus would attract GST @ 5%.
GST Rate on Refined beet and cane sugar = 5%
Therefore it is clear that beet and cane sugar, including refined beet and cane sugar, will fall under heading 1701 and will attract a 5% GST rate.
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