2020 (9) TMI 546 - AAR - GST

Classification of goods - Rate of GST - Fly Ash Bricks - Fly Ash Block - Whether supply of Fly Ash Bricks and Fly Ash Blocks are covered under Chapter heading 68159090 and liable to taxed @ 5% and @ 12% respectively under the GST Act? - HELD THAT - It is observed that Fly Ash Bricks has been omitted from entry No.177 with effect from 15.11.2017. Further, it is also seen that Notification No.1/2017-Central Tax (Rate) has been amended vide Notification No.41/2017-Central Tax (Rate) dated 14.11.2017 vide which Entry No.225A has been inserted in Schedule-I of the said notification wherein Fly Ash Bricks with 90% or more content finds mention. However, since the Fly Ash Bricks manufactured by the applicant are containing Fly Ash content of only 40 to 60%, the same will not be covered under the said entry number. Therefore, since the Fly Ash Bricks manufactured by the applicant does not find mention in any of the Schedules of the said notification from 15.11.2017 onwards, we conclude that the same would be covered under Entry No.453 of Schedule-III of Notification No 01/2017-Central Tax(Rate) with effect from 15.11.2017 onwards. The GST rate on Fly Ash Bricks will be 18% (9% SGST 9% CGST) with effect from 15.11.2017. It is further observed that the entry No.177 in Schedule-II of Notification No 01/2017-Central Tax(Rate) dated 28.06.2017 (under which only Fly Ash Blocks found mention with effect from 15.11.2017) has been omitted with effect from 01.01.2019. It is also seen that Fly Ash Blocks has been inserted in Entry No.225B of Schedule-I of Notification No 01/2017-Central Tax(Rate) dated 28.06.2017 with effect from 01.01.2019. We therefore conclude that the Fly Ash Blocks would be covered under Entry No.225B of Schedule-I of Notification No 01/2017-Central Tax(Rate) dated 28.06.2017 and the rate of GST on the same will be 5% with effect from 01.01.2019.

Summary

Issues: Classification and Taxation of Fly Ash Bricks and Fly Ash Blocks under GST Act

Classification of Products:
The applicant, engaged in manufacturing Fly Ash Bricks and Fly Ash Blocks, sought an advance ruling on the classification of these products under the GST Act. The products are manufactured using specific raw materials and are classified under HSN code 68159910. Sales invoices demonstrate the classification of Fly Ash Bricks and Fly Ash Blocks under this code, with varying GST rates applied based on the product type.

Analysis of Tariff Entries:
The Authority analyzed the Customs Tariff Act, 1975, to determine the classification of Fly Ash Bricks and Fly Ash Blocks. It was established that Fly Ash Bricks fall under Tariff item no. 68159910, while Fly Ash Blocks are classified under Tariff item no. 68159990. The relevant Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 specified the applicable GST rates for these products.

Amendments and Tax Implications:
Subsequent amendments to the notifications impacted the tax treatment of Fly Ash Bricks and Fly Ash Blocks. Notably, Fly Ash Bricks were omitted from entry No. 177 with effect from November 15, 2017. Consequently, the GST rate for Fly Ash Bricks was revised to 18% from that date onwards. Fly Ash Blocks, on the other hand, were included in a different entry with a reduced GST rate of 5% effective January 1, 2019.

Ruling and Conclusion:
Based on the analysis, the Authority issued a ruling stating that Fly Ash Bricks are classified under Tariff item No. 68159910 with applicable GST rates of 12% or 18% depending on the timeline. Fly Ash Blocks are classified under Tariff item No. 68159990 with GST rates of 12% or 5% based on the effective date. The ruling provided clarity on the classification and taxation of these products under the GST Act, ensuring compliance with the relevant notifications and amendments.