In exercise of the powers conferred by sub section 1 of section 9 and sub section

## Policy Analysis Report: Notification No. 01/2021 - Central Tax Rate **1. Executive Summary:** This report analyzes Notification No. 01/2021 - Central Tax Rate, issued by the Ministry of Finance, Department of Revenue, on June 2nd, 2021. This notification constitutes an amendment to the original Notification No. 1/2017-Central Tax Rate, modifying Schedule I and adding an entry to List 1. The core purpose of this amendment is to update the classification and tax rate applicability for certain goods and services under the Central Goods and Services Tax (CGST) Act, 2017. The key findings of this report highlight the specific changes related to the entry 9503 and the addition of "Diethylcarbamazine" to List 1, outlining their implications for relevant stakeholders. **2. Introduction:** This report aims to provide a comprehensive overview of Notification No. 01/2021 - Central Tax Rate, based solely on the information contained within the provided policy text. The analysis focuses on understanding the nature of the amendment, the changes it introduces, and the potential impact on affected parties. **3. Policy Overview:** * This notification amends the original Notification No. 1/2017-Central Tax Rate, dated June 28th, 2017. * The core objective of this amendment, as inferred from the text, is to update the tax rate structure under the Central Goods and Services Tax (CGST) Act, 2017, by modifying the classification and rates applicable to specific goods. **4. Background and Rationale:** This notification is an amendment to an existing policy. The likely reason for this specific amendment is to adjust the classification of goods under the GST regime to reflect changes in the market, address ambiguities in the existing classification, or align with updated recommendations from the GST Council. The inclusion of Diethylcarbamazine to list 1 suggests a change in categorization that might warrant a different tax rate or treatment. **5. Key Provisions / Changes:** This notification introduces the following specific changes to the original Notification No. 1/2017-Central Tax Rate: * **Change 1:** *Against S. No. 259A in Schedule I (2.5), column 2*, the entry "9503" is being substituted. The original entry is not provided in the text, so the specific difference and effect are not known without additional context. However, the change suggests a reclassification or re-categorization of an item previously associated with S.No 259A and Schedule 1 (2.5) to align with code 9503. * **Change 2:** *After Schedule I, in List 1*, the entry "Diethylcarbamazine" is inserted after serial number 230. The effect of this change is that "Diethylcarbamazine" will now be subject to the tax rate or other provisions relevant to items listed in List 1 after Schedule I. What that tax rate or provision *is*, cannot be determined from the text alone. **6. Target Audience and Stakeholders:** Based on the provided text, the target audience and stakeholders directly affected by these changes include: * Manufacturers, suppliers, and distributors of goods classified under entry 9503. * Manufacturers, suppliers, and distributors of Diethylcarbamazine. * Businesses involved in transactions related to goods and services covered under the Central Goods and Services Tax (CGST) Act, 2017. **7. Implementation Aspects (Inferred):** * **Responsible Agency:** The Ministry of Finance, Department of Revenue, is the responsible agency for issuing and implementing this notification. * **Timelines:** The notification comes into force on June 2nd, 2021. * The amendment requires relevant businesses to update their systems and processes to reflect the changes in classification and tax rates for the specified goods. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of these changes is to ensure accurate and consistent application of tax rates under the CGST Act, 2017. By clarifying the classification of items under entry 9503 and adding Diethylcarbamazine to List 1, the government aims to reduce ambiguity and improve tax compliance. The specific impact will depend on the nature of the changes introduced, but it is expected to impact the tax burden on affected goods and services, potentially leading to changes in pricing and supply chain dynamics. **9. Conclusion:** Notification No. 01/2021 - Central Tax Rate, effective June 2nd, 2021, introduces amendments to Notification No. 1/2017-Central Tax Rate. These changes relate to the entry 9503 and the inclusion of "Diethylcarbamazine" in List 1. This notification is significant as it reflects ongoing efforts to refine and update the GST framework, ensuring its relevance and effectiveness in the context of evolving market dynamics. Affected businesses should carefully review these changes and ensure compliance with the updated tax regulations. Further investigation of the original notification and related circulars is recommended for a more comprehensive understanding of the implications.

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