This circular provides clarification on the scope of Entry No. 195B of Schedule II to Notification No. 1/2017–Central Tax (Rate), which prescribes the GST rate for sprinklers and drip irrigation systems including laterals.

Representations were received seeking clarity on whether the entry covers only laterals used in drip irrigation systems or also includes sprinkler irrigation systems and their laterals. In some field formations, a view had been taken that laterals of sprinkler systems and sprinkler irrigation systems were not covered under the said entry.

The issue was examined in the context of the GST rate history of goods falling under HSN 8424. Initially, all such goods attracted 18% GST. Subsequently, nozzles for drip irrigation equipment or sprinklers were placed under a lower rate. On further review, the GST Council recommended a concessional rate for micro-irrigation systems, including sprinklers and drip irrigation systems along with their laterals. Accordingly, Entry No. 195B was inserted to prescribe a 12% GST rate.

The circular explains that micro-irrigation refers to low-pressure irrigation systems where water is supplied through a piped network in small quantities directly to plants. This includes traditional drip irrigation, subsurface drip irrigation, micro-spray, micro-sprinkler, and mini bubbler irrigation systems.

It is clarified that the term “sprinklers” used in Entry No. 195B covers sprinkler irrigation systems as a whole. Therefore, sprinkler irrigation systems comprising nozzles, laterals, and other components are eligible for GST at the rate of 12%.