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2018 (8) TMI 393 - AAAR - GSTClassification of product, SIKA Block Joining Mortar under Tariff Heading 3214 90 90 - whether SIKA Block Joining Mortar manufactured and marketed by the Appellant, is to be classified under Tariff Head 3214 90 10, which the Appellant was declaring voluntarily for the past few years and which the WBAAR held as 3214 90 90 to be the correct classification or Tariff Head 3824 50 90, which the Appellant now insists is the correct classification? - Challenge to Advance Ruling. Held that - It is clear that the SIKA Block Joining Mortar is non-refractory and that it is not used for preparation of surfaces - Considering the nature, use and commercial identity of the item in question and, notwithstanding the Appellant s earlier voluntary declaration about the classification of the item, its classification is to be accepted under Tariff Item 3214 instead, it is to be classified under Tariff Item 3824. The Ruling dated 09.04.2018 of the West Bengal Authority for Advance Ruling is modified to the extent that SIKA. Block Joining Mortar is classified under Tariff Item 3824 as notified taxable under Serial no. 97 of Schedule III vide Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 under the Central Good and Services Tax Act, 2017 and 1125-FT dated 28.06.2017 under West Bengal Goods and Services Tax Act, 2017. Appeal allowed - decided in favor of appellant.
Issues involved: Proper classification of "SIKA Block Joining Mortar" under the Customs Tariff Act, 1975 for GST taxation.
Analysis: 1. Background: The case involves an appeal by M/S Sika India Private Limited against the ruling of the West Bengal Authority for Advance Ruling classifying "SIKA Block Joining Mortar" under Tariff Item 3214 90 90. The appellant contended that the product should be classified under Tariff Heading 3824 50 90. 2. Appellant's Grounds: The Appellant raised several grounds for the appeal, including the jurisdiction of the WBAAR, lack of specificity in the ruling, and the impact on tax rates compared to competitors. The Appellant cited various case laws to support their arguments. 3. Core Issue: The central issue was the proper classification of "SIKA Block Joining Mortar" under Tariff Head 3214 90 10 or Tariff Head 3824 50 90. The Appellant had voluntarily declared the product under Tariff Head 3214 90 10 previously. 4. Comparison of Tax Rates: The Appellant highlighted the significant difference in tax rates under the GST regime for Tariff Head 3214 90 10 (28%) and Tariff Head 3824 50 90 (18%), affecting their competitiveness in the market. 5. Product Composition: The composition of "SIKA Block Joining Mortar" was detailed, emphasizing its use in joining masonry units rather than surfacing preparation, indicating classification under Tariff Head 3824 50 90. 6. Detailed Tariff Head Entries: The entries under the disputed Tariff Heads were examined to determine the appropriate classification based on the nature, use, and commercial identity of the product. 7. Decision: The Appellate Authority modified the ruling, classifying "SIKA Block Joining Mortar" under Tariff Item 3824, aligning with the Appellant's arguments. The decision was based on the non-refractory nature of the product and its specific use for joining masonry units. 8. Outcome: The appeal succeeded, and the classification of "SIKA Block Joining Mortar" was revised to Tariff Item 3824, impacting the applicable tax rates under the GST Act. This detailed analysis covers the issues, arguments, legal references, product composition, and the final decision in the appeal regarding the classification of "SIKA Block Joining Mortar" for GST taxation.
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