In re M/s Jairaj Ispat Limited. (GST AAR Karnataka)
The Char-Dolochar/Dolochar (waste emerging during the process of manufacturing Sponge Iron) supplied by the Applicant is classifiable under Tariff Item 26190090 of Customs Tariff Act, 1975 and therefore, in view of Entry 28 of Schedule III of Notification 01/2017- Integrated Tax (Rate) dated 28 June 2017, attract tax at the rate of 18 percent IGST. The intra-State supply of the same would attract CGST at 9% Entry 28 of Schedule III of Notification 01/2017- Central Tax (Rate) dated 28 June 2017 and similarly a KGST at 9 percent.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND UNDER SECTION 98(4) OF THE KARNATAKA GOODS AND SERVICES TAX ACT, 2017
1. M/s Jairaj Ispat Limited., (hereinafter called “applicant”), Sy. No. 67, 68, B Belagal Village, Kudthini, Bellary- 583115., having GSTIN number 29AAACJ6858PIZN have filed an application for Advance Ruling under Section 97 of the CGST Act, 2017 86 KGST Act 2017 read with Rule 104 of the CGST Rules, 2017 and KGST Rules 2017, in FORM GST ARA-01 discharging the fee of 5,000/- each under the CGST Act and the KGST Act.
2. The applicant is a limited company and is registered under the Goods and Services Act, 2017. The applicant company has sought advance ruling in respect of the following question:
Whether the Char-Dolochar / Dolochar (waste emerged during the process of manufacturing Sponge Iron) supplied by him is classifiable under
(i) Tariff Item 2621 90 90 of Customs Tariff Act, 1975 and therefore, in view of Entry 30 of Schedule III of Notification 01/2017- Integrated MX- (Rate) dated 28 June 2017 as amended from time to time, attract a levy of 18%.
Or
(ii) Tariff Item 2701 20 90of Customs Tariff Act, 1975 and therefore, in view of Entry 158 of Schedule I of Notification 01/2017- Integrated Tax (Rate) dated 28 June 2017 as amended from time to time, attract a levy of 5%?,
3. The applicant is engaged in process of manufacturing Sponge Iron and in the process Char- Dolochar/Dolochar emerges as waste products
a. The applicant is engaged in process of manufacturing Sponge Iron and Char Dolochar/Dolochar emerges as waste products.
b. For manufacturing of Sponge Iron, Iron ore and Coal are fed into Rotary Kiln, wherein reduction of Iron Ore into Sponge Iron takes place with Coal heat. The Iron ore converts into Sponge Iron while travelling into kiln and comes out. When it comes out, it is having the content of magnetic as well as nonmagnetic or low magnetic materials. The magnetic material is called Sponge Iron and the non-magnetic/low magnetic material is called Dolochar.
c. This material is passed through magnetic separator and both the materials are separated. Sponge Iron is the finished product and Dolochar is become waste product emerging out of the process of manufacturing Sponge Iron.
d. This Dolochar contains both Ferrous content & Fixed Carbon. Ferrous content comes from Iron Ore and Fixed Carbon comes from Coal. The Ferrous 86 Fixed Carbon percentage content is very less but still is able to generate some heat and hence same are used in brick manufacturer for heating bricks.
4. The applicant submits that –
4.1 the Government of India on the recommendations of the Council, has vide Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017 notified the rate of IGST that shall be levied on the inter-State supply of goods and as per the notification, the applicable rate of tax that shall be levied on supply of goods, the description of which is specified in the corresponding entry on column (3) of the Schedules under the Notification, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules.
4.2 Explanation (iii) of Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017 provides that “Tariff item”, “sub-heading”, “heading”, and “Chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975.
4.3 the Explanation (iv) provides that the rules of interpretation of the First Schedule to the Customs Tariff Act, 1975 including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this Notification.
4.4 The product proposed to be supplied would be covered under tariff heading 2621 of the Customs Tariff Act, 1975, which deals with waste emerged from the manufacturing of iron and steel. The relevant entries of the Schedules covered there under are as under:
Schedule III of Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017 provides for the list of goods that attract IGST at the rate of 18%. SI.No. 30 of the Schedule reads as under
