Contributed by CA Manindar & Bhavani
Sl. No |
GST-ARA-10/2017/B-13 |
Name of |
HAFELE INDIA PRIVATE LIMITED |
Ruling |
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TMI Citation |
2018 (5) TMI 646 - AUTHORITY FOR ADVANCE RULING - MAHARASHTRA |
AAR State |
MAHARASHTRA |
Macro Issue |
Whether the product "Caesarstone" imported by the applicant can be classified under |
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HSN Code 2506 or 6810? |
Facts |
The applicant is engaged in importation of Bathroom and Kitchenware fitting and |
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Caesarstone Quartz. At the time of importation of Caesarstone Quartz, it is liable to pay |
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Basic Customs Duty and IGST and classified under heading 6810. For outward supply of |
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goods, it is liable to pay GST and there arises the question of whether it is to be classified |
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under heading 2506 or 6810. |
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Sr No |
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HSN Code |
Description |
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IGST Rate |
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1. |
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2506 |
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Quartz (other than natural sands) quartzite, |
5% |
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whether or not roughly trimmed or merely cut by |
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sawing or otherwise in to blocks or slabs of a |
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rectangular (including square) shape |
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2. |
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6810 |
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Articles of cement of concrete or of artificial stone |
15% |
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whether or not reinforces |
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Applicant |
Guiding Principles involved to settle the issue: |
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Stand |
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1. Classification of good under Customs Tariff Act 1975 along with relevant chapter |
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notes of Chapter 25 and 68 |
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- General Rules of interpretation of the first schedule to the Customs Tariff Act 1975
- HSN explanatory notes released by WCO
Whether the good fits under Heading 2506
Quartz is combined with polymers and pigments and compacted under intense vacuum and cut into slabs to for the output -ceasarstone.
The Chapter Note 1 of Chapter 25 clearly states that “------, the headings of this Chapter cover only products which are in the crude state or which have been washed(even with chemical substancese liminating the impurities without changing the structure of the
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product), crushed, ground, powdered, levigated, sifted, screened, concentrated by |
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flotation, magnetic separation or other mechanical or physical processes (except |
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crystallization), but not products that have been roasted, calcined, obtained by mixing or |
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subjected to processing beyond that mentioned in each heading.” |
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It is imperative to understand that the composition of Caesarstone contains 93% crushed |
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quartz. Quartz is combined with high-quality polyester resins and pigments and is then |
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compacted under intense vacuum and pressure into dense and non-porous slabs. |
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As per Chapter Note I to Chapter 68 which clearly provides that chapter does not cover |
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goods falling under Chapter 25. |
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As the manufacturing process is covered under the mechanical process and considering |
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Rule 2(a) and Rule 3(b) of General Rules for Interpretation and Chapter Note 1 to Chapter |
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25, Caesarstone imported shall be construed as a Quartz and classified under chapter 25. |
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Department |
By considering the content of Chapter Note 1 to Chapter 25, the goods should not change |
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Stand |
the character of mineral product. In addition to mechanical and physical process, chemical |
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process is also involved. Such process carried out is beyond the scope of Chapter Note 1 to |
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Chapter 25. Caesarstone is an engineered quartz surface and it is a man made stone or |
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artificial stone. Quartz is one of the raw material to produce Caesarstone and addition of |
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polymer resins and pigments to the quartz changes the character/structure of mineral |
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product. |
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AA also considereda ruling of Harmonised Tariff Schedule of United States in case of |
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Silestone TM wherein the slabs composed of 93% Quartz and 7% of resin binder, it is |
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classified under sub heading 6810.99.00 and considered as artificial stone. |
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Ruling with |
Caesarstone imported by the applicant is to be classified under HSN code 6810 |
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reasons |
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Discussion |
On perusal of the Tariff headings of Chapter 25 and Chapter 68, it is clearly evident that a |
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Outcome |
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processed stone (artificial or natural) will be classifiable under chapter 68 while chapter |
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25 covers only natural stones in crude state. Accordingly, no contrary views have been |
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shared. |
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