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Circular No. 81/55/2018-GST
F.No.354/408/2018-TRU
Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)
*****
North Block, New Delhi
Dated, 31st December, 2018
To,
Principal Chief Commissioners/ Principal Directors General,
Chief Commissioners/ Directors General,
Principal Commissioners/ Commissioners of GST and Central Tax (All),
Madam/ Sir,
Subject: Clarification regarding GST tax rate for Sprinkler and Drip Irrigation
System including laterals–reg.
Representations have been received seeking clarification as regards the scope and coverage of
entry No. 195B of the Schedule II to notification No. 1/2017- Central Tax (Rate), dated
28.06.207. The entry No. 195B was inserted vide notification No. 6/2018- Central Tax
(Rate), dated 25th January, 2018 and reads as below:
S. No
Chapter
Heading/ Sub-
heading/Tariff
Item
Description of Goods
CGST
rate
195B
8424
Sprinklers; drip irrigation system including laterals;
6%
2.
Doubts have arisen as in certain cases a view has been taken in the field that this entry
would not cover “laterals of sprinklers” and “sprinklers irrigation system”, while laterals of
drip irrigations are covered by this entry.
3.
The matter has been examined. Initially, with effect from 1.7.2017, all goods falling
under HS 8424, namely, Mechanical appliances (whether or not hand-operated) for
projecting, dispersing or spraying liquids or powders; spray guns and similar appliances;
steam or sand blasting machines and similar jet projecting machines (other than fire
extinguishers, whether or not charged), were placed under 18% slab. Subsequently, on the
recommendation of the GST Council, the item namely, ‘Nozzles for drip irrigation equipment
or nozzles for sprinkler was placed under 12% GST slab (Entry No. ‘195A’ with effect from
22.09.2017). Upon revisiting the issue of GST rate on micro irrigation including drip
irrigation system, including laterals the GST Council recommended 12% GST rate on micro
irrigation system, namely, sprinklers, drip irrigation system, including laterals. Accordingly,
the said entry 195B was inserted in the notification No. 1/2017- Central Tax (Rate).
3.1
The micro irrigation, sometimes called „localised irrigation‟, „low volume irrigation‟,
or „trickle irrigation‟ is a system where water is distributed under low pressure through piped
network, in a pre-determined pattern, and applied as a small discharge to each plant or
adjacent to it. The traditional drip irrigation using individual emmitters, subsurfaces drip
irrigations (SDI), micro-spray or micro-sprinkler irrigation, and mini bubbler irrigation all
belong to the catgeory of micro irrigation method.
4.
Therefore, the term “sprinklers”, in the said entry 195B, covers sprinkler irrigation
system. Accordingly, sprinkler system consisting of nozzles, lateral and other components
would attract 12% GST rate.
5.
Difficulty, if any, may be brought to the notice of the Board immediately. Hindi
version shall follow.
Yours faithfully
Gunjan Kumar Verma
Under Secretary (TRU-I)
