Background:
Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 is the exemption notification for goods issued under Section 11(1) of the CGST Act, 2017, which superseded Notification No. 2/2017-Central Tax (Rate) with effect from 22.09.2025. S. No. 87 of the Schedule to the said notification exempts goods of heading 1211, namely “Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled”. On the other hand, plants and parts of plants of heading 1211 which are “frozen or dried, whether or not cut, crushed or powdered” are taxable at 5% under Schedule I of Notification No. 9/2025-Central Tax (Rate).
Psyllium seed (Isobgul/Isabgol), classifiable under tariff item 1211 90 13, is a crop in which India is the world’s largest producer and exporter (grown mainly in Gujarat, Rajasthan and Madhya Pradesh). The seeds are, by their nature, traded in dried form. This gave rise to ambiguity and disputes as to whether psyllium seeds supplied by traders are exempt (as seeds of heading 1211 / agricultural produce) or taxable at 5% as dried plant parts, with different positions being adopted in different States. The 57th GST Council therefore recommended (para C1(6) of the Press Release) that clarity be provided on the tax treatment of psyllium seeds by prescribing a NIL rate of GST, irrespective of whether the seeds are fresh, chilled, frozen or dried. The FAQs issued by the CBIC state that a separate entry for psyllium seeds is being created in Notification No. 10/2025-Central Tax (Rate) to remove the ambiguity.
What the Notification provides:
Now, the CBIC vide Notification No. 03/2026-Central Tax (Rate) dated 27.10.2026 (G.S.R. 924(E)), issued under Section 11(1) of the CGST Act, 2017 on the recommendations of the GST Council, has amended Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 by inserting, after S. No. 87 of the Schedule, the following new entry:
| S. No. | Tariff item / heading | Description of goods |
| 87A | 1211 90 13 | Psyllium seeds (Isobgul/Isobgol) |
The new entry is a stand-alone exemption for psyllium seeds and is not qualified by the words “fresh or chilled” which govern S. No. 87. Consequently, the intra-State supply of psyllium seeds will be wholly exempt from central tax whether the seeds are fresh, chilled, frozen or dried.
Corresponding exemptions have been notified for inter-State supplies vide Notification No. 03/2026-Integrated Tax (Rate) dated 27.10.2026 (G.S.R. 925(E)) amending Notification No. 10/2025-Integrated Tax (Rate), and for Union Territories vide Notification No. 03/2026-Union Territory Tax (Rate) dated 27.10.2026 (G.S.R. 926(E)) amending Notification No. 10/2025-Union Territory Tax (Rate).
Effective date:
The Notification comes into force with effect from 1st November, 2026. Supplies of psyllium seeds made on or after that date are exempt. For the period up to 31.10.2026, the existing entries continue to apply and the Notification does not provide any retrospective regularisation.
Key takeaways for taxpayers and the industry:
- Scope confined to seeds: The exemption covers only psyllium seeds of tariff item 1211 90 13. Psyllium husk (tariff item 1211 90 32), husk powder and other processed/derivative products are not covered by S. No. 87A and continue to be governed by the existing rate entries applicable to heading 1211 and to the relevant processed products.
- Traders and commission agents: Dealers engaged exclusively in the supply of psyllium seeds will be making exempt supplies; those who deal only in exempt goods are not liable for registration under Section 23(1)(a) of the CGST Act. Dealers making both exempt and taxable supplies (e.g., seeds and husk) will have to reverse common ITC under Section 17(2) read with Rules 42 and 43 of the CGST Rules.
- Exporters: Export of psyllium seeds remains a zero-rated supply under Section 16 of the IGST Act notwithstanding the exemption, and refund of unutilised ITC on inputs and input services used for such exports continues to be available under Section 16(2) of the IGST Act read with Section 54(3) of the CGST Act.
- Processors (husk/powder manufacturers): Procurement of seeds becomes free of GST, reducing working capital blockage; however, since the input is exempt, no ITC arises on the seeds, and the output (husk/powder) continues to be taxable at the applicable rate.
- Compliance: HSN masters, e-invoice/e-way bill configurations and GSTR-1 reporting (exempt supplies in Table 8) should be updated from 01.11.2026; tax collected on seeds supplied on or after 01.11.2026 would have to be deposited under Section 76 and would not be available as ITC to the recipient.
Similar notifications have been passed under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”).
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/10/N.-No.-03-2026-CT-UT-IG-Rate.pdf
