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2019 (11) TMI 112 - AAR - GSTClassification of goods - rate of tax - Bentonite Powder - competitors are selling the Bentonite Powder @ 5% (in electrical shops for earthing purpose) - HELD THAT:- Bentonite in crude form or processed form is covered under HSN 2508 - Other clays (not including expanded clays of heading 6806), andalusite, kyanite and sillimanite, whether or not calcined; mullite; clamotte or dinas earths and as such is used as a binding agent in the manufacture of iron ore in the steel Industry. It is also used for piling; whereas the Bentonite used as filling compound for electrical earthing usually consist of mixture of Bentonite powder, Wood charcoal powder, Graphite powder, Sodium Sulphate etc. The earthing compound absorbs moisture from the surrounding soils reducing the contact resistance and in turn effectively increasing the Size of the Copper earth rods installed and buried in the cable trench. As it is a compound used as surface tension reducing agent; it squarely falls under Heading 3824 - Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products) not elsewhere specified or included - Sub -Heading - 3824 99 17 - Surface tension reducing agents and attract GST at the rate of 18% as per SI No. 97 of Schedule III of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. The Gujarat Authority for Advance ruling has in RE : M/S. DOCSUN POWER PVT. LTD. [2018 (6) TMI 704 - AUTHORITY FOR ADVANCE RULING, GUJARAT] ruled that ‘Back Fill Compound’ is classifiable under Tariff Heading 3824. It is stated that Back Fill Compound is obtained by mixing Bentonite powder, Wood charcoal powder, Graphite powder and would not fall under Tariff Heading 2508. Mixture of Bentonite powder used for earthing purpose is liable to GST at the rate of 18%.
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