Electronics Ministry to Adopt HS Frame for GST

After the passage of the Constitution (One Hundred and Twenty Second Amendment) Bill, 2014 for facilitating the introduction of Goods and Services Tax in the country, the target date for the introduction of GST has been set as 01.04.2017. GST Rates will be specified by the Inter State and GST Council, CGST and IGST Bills are being drafted by the Central Government for Presentation to the winter session of Parliament summoned for early November as a special case.

Framework regarding GST rates in the electronics sector: A suggested system based on HS Coding and the related industry segment classifications under Alpha Code with Electronics Sector has been developed. The highlights of the coding system and GST rates are given in the following example:

HS Code		Item Description	Covered in Agreement	Class Code	CVD	Kerala VAT	KVAT Ref
(1)		(2)	(3)	(4)	(5)	(6)	(7)
	-	Telephone sets, including telephones for cellular networks or for other wireless networks:
8517 12	--	Telephones for cellular networks or for other wireless networks:
8517 12 10	----	Push button type	NITA	C1 -Push Button Type Mobile Handsets	12.5	5	III(69)(29)(b)
8517 12 90	----	Other	NITA	C2 - Smart Phones	12.5	5	III(69)(29)(b)
8517 70	-	Parts:	ITA-I/ ITA-II	C3 - Mobile Handset Parts	12.5	5	III(69)(30)

Col.1 - Gives the HS Codes at 8 digit level

Col.2 - Gives the Item Description as notified in ITC(HS) based on HS2012

Col.3 - Gives coverage of item under the following abbreviations:

ITA I – IT Agreement concluded in Singapore 1996

ITA II – IT Agreement concluded in Nairobi in 2015

NITA – Electronic items such as consumer goods not covered in ITA I or ITA II

Col. 4 – This gives the Alpha codes for electronics sector.

Col.5 CVD – This is the Excise duty (generally 12.5%) as notified. The rate has to be adjusted for retail mark up. Thus 12.5% with 20% retail abatement will means 10.42% (12.5÷1.2). Thus the CGST rate at existing level will be 10.42.

Col.6 – Kerala VAT Schedule has been coded for HS2012. Database has been created and sorted by HS lines. Thus the SGST rate of 5% for IT items and 14.5% for others electronic items.

Col.7 - Kerala VAT Reference gives the schedule number, Serial No. and Sub-Serial Number in the respective VAT Act.

The department has sought regarding the CGST, SGST and IGST rates for Electronics sector. It also wants industry views regarding continuation of differential Excise Duty dispensation in the GST Regime.