Punjab Amends GST Rates for Jaggery, Khandsari, Rab, and Pencil Sharpeners

The Government of Punjab, through its Department of Excise and Taxation (Excise and Taxation-II Branch), issued a notification on June 17, 2023, introducing amendments to the Goods and Services Tax (GST) rates for several commodities. This notification, bearing No. S.O. 46/P.A.5/2017/S.9 and 15/2023, was issued in exercise of powers conferred by sub-section (1) of section 9 and sub-section (5) of section 15 of the Punjab Goods and Services Tax Act, 2017 (Punjab Act 5 of 2017). It modifies the earlier Notification No. S.O.16/P.A.5/2017/ S.9/2017, dated June 30, 2017, which originally outlined the GST schedules. The amendments specifically target the classification and applicable tax rates for various types of jaggery, khandsari sugar, rab, and pencil sharpeners, and were made following recommendations from the Council (referring to the GST Council, the governing body for GST in India). The legislation provided: “…on being satisfied that it is necessary in the public interest so to do, the Governor of Punjab, on recommendations of the Council, is pleased to make the following amendment…” This notification is deemed to have come into force retrospectively on March 1, 2023.

The primary objective of this amendment is to streamline and clarify the GST framework for certain goods, addressing previous ambiguities and adjusting tax burdens. Under the revised provisions, the entry for "Jaggery of all types including Cane Jaggery (gur), Palmyra Jaggery, pre-packaged and labelled; Khandsari Sugar, pre-packaged and labelled; Rab, pre-packaged and labelled" has been substituted in Schedule I, which applies a 2.5% GST rate. This change specifically emphasizes the "pre-packaged and labelled" condition for these products to qualify for the 2.5% rate, indicating a policy intent to differentiate between bulk and packaged sales for tax purposes. Concurrently, a new entry, S. No. 186A, has been inserted into Schedule II, which attracts a 6% GST rate, specifically for "Pencil sharpeners" under HSN 8214. This reclassification is further reinforced by an amendment to Schedule III, which applies a 9% GST rate. In S. No. 302A of Schedule III, the words "[other than pencil sharpeners]" have been inserted at the end of the existing entry, effectively excluding pencil sharpeners from the higher 9% tax bracket. This adjustment means that pencil sharpeners, which were likely previously taxed at 9%, will now be subject to a lower 6% GST rate. These changes reflect a legislative intent to rationalize tax rates and provide clearer definitions for goods, ensuring consistency and reducing potential classification disputes within the Goods and Services Tax regime.

Keywords: Punjab GST, GST rates, Jaggery GST, Khandsari GST, Rab GST, Pencil Sharpeners GST, Tax Amendment, Excise and Taxation, Punjab Goods and Services Tax Act Geo Tags: India, Punjab District: Not Applicable