Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 24-9-2018 – There are various products where tariff classification / heading poses a challenge, more so when such classification results in or impacts exemption and /or rate of tax. Block Joining Mortar One such item is Block Joining Mortar which is widely used in building construction, viz joining masonry units like AAC blocks, concrete blocks, fly ash bricks etc. This product does not have refractory property and is also not used for surfacing preparations for facades, indoor walls, floors, ceilings etc. Its chemical base is cementitious mortar modified with polymers. It is available in powdered form in 30 kg bags. It needs to be mixed thoroughly with water before applying a thin uniform layer of the paste to cleaned and leveled surface of the masonry units (AAC blocks, fly ash brick etc.) using trowel. It is, therefore, a bonding compound used for joining masonry units like AAC blocks and fly ash bricks. It is a powd
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' fillings 321490 – Other: 32149010 – Non-refractory surfacing preparations 32149020 – Resin Cement 32149090 – Other Terms like non-refractory surfacing preparation or mortar are not defined in the GST Act, nor is the ambit of the related headings, discussed in the Explanatory Notes to the Tariff Act. The contesting Heading 3824 covers 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. On the Advance Ruling being sought on this classification issue, West Bengal Advance Ruling Authority (WBAAR) gave a ruling to the effect that SIKA Block Joining Mortar is to be classified under Tariff Item 3214 90 90 of the Customs Tariff Act, 1975, and, therefore, taxable under Serial No. 24 of Schedule IV vide Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 under CGST Act, 2017 and 1125-FT, dated 28-6-2017 under WBGS
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imilar products under HSN Tariff Heading 3824 50 90 and that the same type of product cannot be classified under two HSN Tariff Headings and thereby, chargeable under two different rates of tax. Thus, the core issue to be addressed was whether the block joining mortar is to be classified under Tariff Head 3214 90 10, which the Appellant was declaring voluntarily for the past few years and which the WBAAR held as 3214 90 90 to be the correct classification, or Tariff Head 3824 50 90. It was stated that while it had earlier classified their product 'SIKA Block Joining Mortar' under Tariff Head out of ignorance and it made no difference as the duty/tax payable under both the heads, that is Tariff Head 3214 90 10 and Tariff Head 3824 50 90, was the same. Under the GST Act, however, there is a difference of 10% which is pushing them out of market as its competitors are supplying the similar products charging lower tax. Following is the comparison of duty/tax in pre- and post-GST reg
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