CBIC has issued Circular No. 265/11/2026-GST dated 28 October 2026, clarifying the classification and GST applicability of certain goods following the 57th GST Council meeting. The circular covers sublimation paper, toys, used motor vehicles under the margin scheme and seaweed extract-based bio-stimulants.
The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 265/11/2026-GST dated 28 October 2026, has clarified the classification and applicability of GST on specified goods based on the recommendations of the 57th GST Council meeting held on 8 October 2026 in New Delhi.
The circular provides clarity on four major issues:
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Sublimation Paper: Sublimation paper is classified under HSN heading 4809 and attracts GST at 18%. Past classification and rate disputes are recommended to be regularised on an “as is where is” basis.
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Classification of Toys: The relevant GST rate entries cover toys under HSN heading 9503, rather than being restricted to only the specifically illustrated wheeled toys. The applicable rates are 5% for covered non-electronic toys and 18% for covered electronic toys.
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Input Tax Credit on Used Motor Vehicles: Under the applicable GST margin scheme, the restriction on Input Tax Credit (ITC) applies to tax paid on the purchase of second-hand vehicles. ITC on other eligible inputs and input services, such as repairs, spare parts, rent and marketing services, may be available subject to the CGST Act and applicable conditions.
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Seaweed Extract-Based Bio-Stimulants: Specified bio-stimulants registered under Schedule VI to the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985, are classified under HSN heading 3101. Past classification disputes are also recommended to be regularised on an “as is where is” basis.
The circular aims to promote uniform classification, clarify applicable GST rates, provide guidance on ITC eligibility and reduce disputes between taxpayers and tax authorities.
Reference: CBIC Circular No. 265/11/2026-GST dated 28 October 2026.
Source: CA Sansaar