2022 (7) TMI 402 - AAR - GST

Scope of advance ruling - Classification of goods - rate of GST - Fly Ash Blocks - merit classification under CTH 6815 or otherwise? - HELD THAT - Section 95(a) of CGST Act 2017 defines Advance Ruling to mean a decision provided by the authority or the Appellate Authority or the National Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-section (1) of Section 100 or of section 101C of the CGST Act, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the Applicant. Thus Section 95(a) specifies that an advance ruling can be applied for, only in relation to proposed supply of goods or services or both - It is evident that advance ruling can be extended for a proposed transaction as well as transaction being undertaken by the applicant. Thus it is clear that the Advance ruling is in respect of a transaction of supply whether proposed or being undertaken. The Jurisdictional officer has verified the premises of the applicant and has reported that the applicant has no infrastructure facility to commence the manufacture of fly ash bricks/blocks and they are not dealing with any material at present. Further, from the photographs furnished along with the report, it is seen that the applicant is housed in a single room of first floor of a building which has been declared as their principal place of business and do not even remotely has the required infra-structure as furnished in the Video submitted by the applicant. It is seen that the applicant has no infrastructural facilities for the proposed manufacture, has not received any orders for supply of the proposed product to be manufactured. Further from the report from the Jurisdiction authority it is evident that the applicant has not substantiated any infrastructure (in terms of raw materials/machinery/demand, etc) based on which such a supply can be undertaken by them. In this scenario, it is held that the application made by them is pre-mature and does not fall under the ambit of the proposed transaction i.e., proposed supply of goods or services. The application is not admitted for ruling as the applicant has not substantiated the proposed transaction with necessary details/documents.

Summary

Issues Involved:
1. Classification under Customs Tariff for "Fly Ash Blocks".
2. Rate of GST applicable for "Fly Ash Blocks".

Detailed Analysis:

1. Classification under Customs Tariff for "Fly Ash Blocks":
The applicant sought clarification on the classification of "Fly Ash Blocks" under the Customs Tariff. They proposed that "Fly Ash Blocks" should be classified under Chapter 6815 of the Customs Tariff Act. Specifically, they suggested that while "Fly Ash Bricks" and tiles fall under 6815 9910, "Fly Ash Blocks" should be classified under 6815 9990 - Others, as there is no specific heading for Fly Ash Blocks.

2. Rate of GST applicable for "Fly Ash Blocks":
The applicant requested an advance ruling on the GST rate applicable to "Fly Ash Blocks". They argued that as per the amended Notification 01/2017 CT(Rate) dated 28.06.2017, effective from 01.01.2019, "Fly Ash Bricks and Fly Ash aggregates with 90% or more Fly Ash content" attract GST at 5%. They contended that "Fly Ash Blocks" attract a uniform GST rate of 5%, irrespective of the fly ash content, as per Sl.No.225B in Schedule I of the notification. They referenced the Gujarat Authority for Advance Ruling's decision in the case of M/s Dipakkumar Ramjibhai Patel, which held that "Fly Ash Blocks" attract 5% GST from 01.01.2019.

Proceedings and Evidence:
- The applicant was asked to provide details of the proposed manufacturing process, infrastructure, and purchase orders. They submitted a video recording of the manufacturing process from another unit and mentioned that they had no infrastructure in place yet, as they were awaiting clarity on the GST rate.
- The jurisdictional officer's report indicated that the applicant had no infrastructure for manufacturing fly ash bricks/blocks and was not currently dealing with any materials. The premises were merely an office space without the necessary facilities for manufacturing.

Admissibility of the Application:
- The applicant argued that under Section 95(c) of the CGST/TNGST Act 2017, a person proposing to undertake an activity can seek an advance ruling.
- However, the authority noted that advance rulings are intended for transactions of supply, whether proposed or being undertaken. Since the applicant had no infrastructure or orders for the proposed supply, the application was deemed premature and not falling under the ambit of a proposed transaction.

Ruling:
The application was not admitted for ruling as the applicant failed to substantiate the proposed transaction with necessary details and documents. The authority concluded that without evidence of infrastructure or orders, the application was premature and inadmissible.