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2018 (9) TMI 691 - AAR - GSTClassification of goods - Polysulphide sealants - There are five competing headings in which the said product can be covered. They are Heading 3214; Heading 2830; Heading 3911; Heading 4002; Heading 3506. Held that - The product in question, Anabond Tuffseald, Polysuphide Sealant contains two components, viz., polysulphide polymer (resin/rubber) and hardener (acts as the curing agent). Liquid polysulfide polymers form the basic ingredient of the sealant formulation and Manganese dioxide is the curing agent. Both resin and hardener are packed separately within the same container. - The base and the curing agent are presented in a single pack and are intended to be used together and complimentary to one another. Thereby, the conditions of the section Note 3 is satisfied. When the conditions are satisfied, then, if on mixing, the resultant is a product of Section VI or VII, then such sets are to be classified in the heading appropriate to that product Mastics are spelt in heading 3214(under Section VI) of the Tariff. From the above, it is evident that the product in hand is classifiable under Heading 32141000 of the Customs Tariff. The other probable chapter heads under which the said product may be classified as stated by the applicant, do not merit the classification as Chapter 2830 90 20 covers Polysulphides. As per explanatory notes to HSN, the polysulphides classified here are mixtures of sulphides of same metal. The polysulphide in question is an organic compound and is a synthetic rubber. Therefore, the product under consideration is not classifiable under this heading - Chapter 3506 91 covers adhesives based on polymers of headings 3901 to 3913 or on rubber. As per explanatory notes to HSN, The heading excludes products having the character of mastics, fillings, etc., of heading 3214. Therefore the product under consideration is not classifiable under this heading - Chapter 3911 covers polysulphides. As per explanatory notes to HSN, Polysulphides are polymers characterised by the presence of monosulphide linkages in the polymer chain...In polysulphides each sulphur atom is bound on both sides by carbon atoms, as opposed to the thioplasts of Chapter 40, which contain Sulphur-sulphur linkages. In the case at hand, Sulphur-Sulphur linkages are present and therefore they are thioplasts. Hence, the product is not classifiable under this heading - Chapter 4002 covers synthetic rubber and factice derived from oils, in primary forms or in plates, sheets or strip; mixtures of any product of heading 4001 with any product of this heading, in primary forms or in plates, sheets or strip . The product in question contains polysulphide rubber/resin which is a synthetic rubber. In the present case, classification of the product can be done based on the Section, Chapter Notes and Headings and therefore classification under Heading 4002 is ruled out. Ruling - The Polysulphide Sealant manufactured by the applicant and marketed under the trade name AnabondTuffseald is classifiable under CTH 3214 10 00 of the First Schedule to the Customs Tariff Act, 1975.
Issues Involved:
1. Classification of 'Polysulphide sealants' under GST. 2. Determination of the appropriate Customs Tariff Heading (CTH) for 'Polysulphide sealants'. Issue-wise Detailed Analysis: 1. Classification of 'Polysulphide sealants' under GST: The applicant, engaged in manufacturing engineering adhesives and sealants, sought advance ruling on the classification of 'Polysulphide sealants' marketed under the trade name 'Anabond Tuffseald'. The product consists of two components: polysulphide polymer (resin/rubber) and a hardener (curing agent). Both components are packed separately within the same container and mixed before application. The applicant proposed five competing headings for classification: Heading 3214, Heading 2830, Heading 3911, Heading 4002, and Heading 3506. 2. Determination of the appropriate Customs Tariff Heading (CTH) for 'Polysulphide sealants': Heading 3214: The applicant argued that CTH 3214 covers various types of mastics, including sealants. The product, being a mastic based on rubber, fits under CTH 3214. The HSN Explanatory Notes support that "mastics based on rubber" fall under this heading. The product, presented as a set containing polysulphide rubber and hardener, satisfies the three conditions mentioned in Note 3 to Section VI, making it classifiable under Tariff item 32141000 with a GST rate of 28%. Heading 2830: Chapter 28 covers inorganic chemicals and compounds. However, polysulphides, being products of a condensation reaction between organic polyhalides and alkali polysulphides, are organic compounds. The HSN Explanatory Notes clarify that Heading 2830 covers mixtures of inorganic polysulphides of the same metal, which does not apply to the polysulphide rubber compound in question. Thus, classification under Chapter 28 is ruled out. Heading 3911: Polysulphide polymers characterized by mono sulphide linkages fall under CTH 3911. However, the product in question contains Sulphur-Sulphur linkages, making it a thioplast, not covered under Heading 3911. Therefore, classification under this heading is also ruled out. Heading 4002: This heading covers synthetic rubber, including thioplasts. The product contains polysulphide rubber, a synthetic rubber. However, since the product is presented as a set containing both resin and hardener, it becomes a mastic with a specific classification under CTH 32141000. Hence, classification under Heading 4002 is ruled out. Heading 3506: This heading covers adhesives and glues. However, the HSN Explanatory Notes exclude mastic preparations from this heading. The product, being a mastic or sealant, is understood in trade as a sealant, not an adhesive. Therefore, classification under CTH 3506 is ruled out. Conclusion: The product 'Polysulphide Sealant' is classifiable under CTH 3214 10 00 of the First Schedule to the Customs Tariff Act, 1975, as applicable to GST. This classification is supported by the HSN Explanatory Notes and the specific nature of the product as a mastic or sealant. The ruling clarifies that the product is subject to GST as per Explanation (iii) to Notification 1/2017-Central Tax (Rate) dated 28.06.2017 and G.O. Ms No. 59, Commercial Taxes and Registration (Bl) dated 29th June 2017.
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