GST on Aerated Water

Last updated on April 14th, 2021 at 05:04 pm

GST on Aerated Water

GST Rate on Aerated Water under GST

A regular/normal registered taxpayer whether a manufacturer or supplier of aerated water will be taxed at the rate of 28% but will be eligible for the input tax credit.

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Who can avail the benefit of  Composition Scheme u/s 10(1)?

• Manufacturers except the below mentioned.

• Persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II of the said Act.
  • As per clause (b) of paragraph 6 of Schedule II :- The following composite supplies shall be treated as a supply of services, namely:— (b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

• Other suppliers.

List of manufacturers who are excluded from the purview of the composition scheme u/s 10

Before the CGST notification no. 43/2019 dated 30th September’19 was issued there were only manufacturers of 3 types of described goods who were excluded from the levy of composition scheme. Manufacturers of one more good are added to the list who cannot avail the composition scheme.

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Note: There is no restriction on trading/supplying the above-described goods and availing the benefit of composition scheme u/s 10(1) of the CGST Act 2017.

Note: This notification shall come into force on the 1st day of October 2019.

Composition Scheme as per CGST(R) Notification no. 2/2019 dated 7th March 2019

As per sub-point (viii) of point 1 in conditions column: – Persons who are engaged in making supplies of the specific goods listed below are disallowed from taking registration as a service provider under the composition scheme notified.

Following are the listed goods

Before the CGST(Rate) Notification no. 18/2019 dated 30th September’19 was issued service providers who intended to take registration in the above composition scheme were denied registration if they were/wanted to supply the specific 3 types of goods listed below. With the latest notification, one more good is added to the list which cannot be supplied.

• Ice cream and other edible ice, whether or not containing cocoa
• Pan Masala
• All goods, i.e. Tobacco and manufactured tobacco substitutes
• Aerated Water (Inserted vide CGST(R) notification no. 18/2019 dated 30th September’19

Note: There is a restriction on trading/supplying the above-described goods as a composite supplier(service provider who also supplies goods) who takes/has taken registration under composition scheme as per CGST(Rate) Notification No. 2/2019 dated 7th March’19 where tax @6% on goods and service provider or both are charged. 

Note: This notification shall come into force on the 1st day of October 2019.

Conclusion

• Any person engaged in the manufacturing of aerated water shall not be eligible to take the benefit of the composition scheme.

• Any person who is a supplier of aerated water will be eligible to take the benefit of the composition scheme.

• Any person who supplies aerated water in the restaurant will be eligible to take the benefit of the composition scheme u/s 10(1).

• Any person who is registered as a service provider as per CGST(Rate) Notification No. 2/2019 dated 7th March’19 also supplies aerated water will not be eligible to take the benefit of the composition scheme.

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Following notifications and parts from the CGST Act are used to compile the above post

• CGST Notification no. 43/2019 dated 30th September 2019
• CGST Notification no. 14/2019 dated 7th March 2019
• CGST Notification no. 8/2017  dated 27th June 2017
• CGST(Rate) Notification no. 18/2019 dated 30th September 2019
• CGST(Rate) Notification no. 2/2019 dated 7th March 2019
• CGST(Rate) Notification no. 9/2019 dated 29th  March 2019
• Section 10 of CGST Act 2017
• Schedule II of CGST Act 2017

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CA Ankita Khetan

Founder at Financepost.in

Chartered Accountant in practice, DipIFRS (from ACCA, UK), Post Graduate in Commerce, Certified Independent Director (from IICA), and holds a certification in Forex and Treasury Management course (by ICAI).

She can be contacted at info.financepost@gmail.com

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