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TMI Blog2018 (11) TMI 1827X X X X Extracts X X X X X X X X Extracts X X X X ..... fashion, i.e., Rule 1 takes precedence over Rule 2, Rule 2 over Rule 3, etc. The General Interpretative Rules are explained at the beginning of Volume 1 of the Explanatory Notes to the Harmonized System. These rules are also adopted for interpretation of Customs Tariff by India. Upon considering of General Interpretative Rules, there seems no possibility that any goods may be classified under more than one heading / sub-heading and therefore, there seem no rationable to allow use of different codes for a commodity while exporting. Prescribing different GST rates (5% and 12%] for any good is definitely not the intention of government and it is imperative that the item should be classified properly in view of applicable classification rules - Although, the applicant has submitted that it is supplying the goods in question in domestic market (i.e. within the Country) under the heading 2802 and charging GST @ 18% and intends to continue doing same yet it doesn't seem, logical that the same good for the purpose of export out of country may be classified under different headings. Moreover, the applicant has failed to provide any logical reason on which basis his goods may be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Espania (Spain) 2503 00 10 Europe 2503 00 90 4005 91 90 (pre-dispersed Insoluble Sulphur) It is also stated by the applicant that its competitor i.e. Flexsys America L.P. is exporting Insoluble Sulphur to various countries by using different HSN codes as per the requirements of different customers in different countries. The applicant has submitted Bills export data of USA and import data in India for Insoluble Sulphur from USA and Malaysia in support of this claim. 5. The applicant further explains that Insoluble Sulphur is primarily used in rubber industry. Its advantage over ground natural Sulphur is that it does not cause bloom and that it does not dissolve and migrate in rubber. It allows the chains of Sulphur to combine with one another to form polymeric Sulphur, which is insoluble in organic solvents and elastomers. In a rubber compound, it is suspended similar to inert filler, though exhibiting thermoplastic behaviour, softening to a degree at processing temperature. That most Insoluble Sulphur commercially available contains over 90% of polymeric sulphu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y additional benefit is available on the basis of changed classification, applicant undertakes in the application to relinquish such benefit. Question for Advance Ruling 10. In the backdrop of above stated factual position, applicant has submitted following question for advance ruling:- Whether Applicant can classify and clear Insoluble Sulphur for export under tariff heading under ITC HS 3812 39 30, ITC HS 3824 90 90, ITC HS 2503 00 10, ITC HS 2503 00 90 and ITC HS 4005 91 90 (Pre-dispersed Insoluble Sulphur) as desired by the customers from Thailand, Mexico, Espania (Spain) and Europe respectively? Opportunity of Personal Hearing 11. The case was initially taken up for hearing on 23.11.2018. On 23.11.2018, Sh. Abhinav Kansal, advocate from M/s BSM Legal (PoA) appeared before the authority and submitted an application for adjournment on behalf of applicant. The request of the applicant was acceded to and case was adjourned to 29.11.2018. 12. On 29.11.2018, Sh. Rupender Sinhmar assisted by Sh. Abhinav Kansal, advocates from M/s BSM Legal (PoA) and Sh. Antony Almeida, Sr. Vice President - Finance Accounts of the applicant company appeared before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be decided by higher authorities, hence beyond his jurisdiction. Discussions and Findings of the Authority 15. Coming to the question raised in the application, a clarification is sought that whether Applicant can classify and clear Insoluble Sulphur for export under tariff heading under ITC HS 3812 39 30, ITC HS 3824 90 90, ITC HS 2503 00 10, ITC HS 2503 00 90 and ITC HS 4005 91 90 (Pre-dispersed Insoluble Sulphur) to various countries, which are Thailand, Mexico, Espania (Spain) and Europe respectively. 16. The CGST Notification No. 01/2017-Central Tax (Rate), dated 28th June, 2017 (and the corresponding HGST Notification No. 35/ST-2 dated 30.06.2017) specifies the rates of tax applicable on Intra-State supplies of goods under GST regime. Likewise, the IGST Notification No. 01/2017-Integrated Tax (Rate), dated 28th June, 2017 specifies the rates of tax applicable on Inter-State supplies of goods under GST regime. These notifications specify the rates of GST on different goods by classifying these under various Chapters / Headings / Sub-headings / Tariff items. The explanations (iii) (iv) appended to the above notifications provide that rules of interpretation fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the said 6 digit tariff code. The Indian Trade Classification, also known as Indian Tariff Code (ITC) has 8 digit classification, which has been designed in a way without any modification of first 6 digit as per H.S. code system, but followed by another two digit classified as 'tariff item . So ITC system classifies the goods under first four-digit code called 'heading' and every six digit code. called 'sub-heading' and 8-digit code called 'Tariff Item'. This addition of seventh and eighth digit is done, within the permissible limit of World Customs Organization, without any changes in H.S. code system. 19. The objective of HS Codes is to provide a classification system that associates each individual product with a single heading (and, as the case may be, single sub-heading), to which that product can be simply and unequivocally assigned. It also contains certain interpretation rules designed to ensure that a given product is always classified in one and the same heading (and sub-heading), to the exclusion of any others which might appear to merit consideration. As per guidelines by WCO, all classification decisions must be based upon the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gun cases, drawing instrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Harmonized System, even by the material that they are made from. In the unlikely event it is needed, this GIR provides for classification with the goods to which are most similar in nature General Interpretative Rule 5 relates to containers and packaging for goods. Finally, General Interpretative Rule 6 requires the whole process to be repeated main as a separate exercise to choose the five-digit subheading and then again for the six-digit subheading level as required. In light of application of above rules, there seems no possibility that any goods may be classified under more than one heading / sub-heading and therefore, there seem no rationable to allow use of different codes for a commodity while exporting. 22. Moreover, as submitted earlier, CGST notification No. 1/2017-Central Tax (Rate), dated 28 th June, 2017 and the corresponding HGST notification specify GST rates on intra-state supplies of Goods. As per these notifications, above mentioned tariff items attract the following rates of GST:- Tariff Item Rate of GST (CGST + HGST) 38123930 18% 38249090 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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