CLASSIFICATION AND RATE OF STONE PRODUCTS – ADVANCE RULING

[Dr. Sanjiv Agarwal]

The question for determination of classification of the goods viz., Polished/Processed Limestone slabs, for the purposes of GST levy was examined by Authority for Advance Ruling  and its appellate body recently.

In Re: Maheshwari Stone Supplying Company 2018 (12) TMI 1274 - APPELLATE AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA; , the applicant sought advance ruling on classification of goods and rate thereof, i.e, polished/processed limestone slabs. The AAR vide its ruling dated 25.03.2018. [2018 (6) TMI 458 - AUTHORITY FOR ADVANCE RULING HYDERABAD TELANGANA] ruled that polished/processed limestone slabs are correctly classifiable under heading 6802 of the GST Tariff the applicable rate of GST is 28%.

Being aggrieved, the appellant preferred an appeal before AAAR.

The AAAR observed that since (i) the basis/rationale and reasoning in fixing quantum of levy @ 28% (or 18% as subsequently reduced), is a policy-decision of the Government(s)/statutory GST Council, which cannot fall for examination/consideration in the realm of appeal proceedings under the statute and are beyond the scope/domain of powers of this Authority being a creature of the statute; (ii) the newspaper reports, press releases, slogans, purported economic effects of the rate of tax, do not constitute legal or tenable material/grounds for determining classification of goods - which has to be purely based on statutory grounds i.e., based on relevant Tariff entries, Notes and Rules for interpretation as applicable to the issue on hand. Accordingly, it proposed to consider only the legally relevant grounds raised by the appellant against the impugned order.

It also observed that AAR findings were concise and do not reflect a detailed examination and analysis of the headings, Chapter Notes vis-a-vis the goods/processes, as ought to have been done in the given context. Moreover, as against totally 5 (five) questions framed for the Advance Ruling by appellant, the Advance Ruling as rendered addresses only the first two questions and not the remaining questions. Though the ruling rendered covering the first two questions would lead to and imply a negation/negative ruling in respect of the remaining three questions, propriety of the proceedings required specific ruling with regard to each question raised.

Further, the main question for determination in this appeal is the correct classification of the goods viz., Polished/Processed Limestone slabs, for the purposes of GST levy. Whether the same would fall under specified headings of Chapter 25 (i.e., Heading 2515/2516/2521 or 2530) as claimed by the appellant; or would fall under Chapter 68 (Heading 6802) as held by the Advance Ruling Authority. Other questions framed in the application are corollary to the said main question; their determination would depend upon that of the main question.

The AAAR ruled as follows:

SI. No.	Question framed for Advance ruling	Ruling (by this Appellate Authority)
(A)	In which Chapter the commodity called “Polished/Processed limestone slabs” falls?	The commodity “Polished/Processed limestone slabs” falls under Chapter 68 of the First Schedule to the Customs Tariff Act, 1975; for reasons detailed above.
(B)	Under which HSN Code the above commodity comes?	The commodity comes under Chapter Heading 6802 (Tariff Item No. “6802 92 00 - Other calcareous stone”) of the Schedule.
(C)	Can we put them under “Mineral substances not elsewhere specified or included” which is mentioned under HSN Code 2530 ?	The goods Polished/Processed Limestone slabs do not fall under HSN Code - Chapter Heading 2530 of the Schedule.
(D)	Can we retain them under any of the HSN Codes 2515/2516/2521?	The goods Polished/processed Limestone slabs do not fall under HSN Codes i.e, Chapter headings 2515/2516/2521 of the Schedule.
(E)	Can we retain them under HSN Code 25 with inaugural phrase of “Goods not mentioned elsewhere” as mentioned at the start of column of 5%?	The goods would not fall under Chapter 25 of the Schedule, in view of the above discussion and findings.

Thus, the AAR dated 25.03.2018 was modified accordingly.