Summary of AAR in Hafele India Private Limited

Sl. No

GST-ARA-10/2017/B-13

Name of

HAFELE INDIA PRIVATE LIMITED

Ruling

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

HSN Code 2506 or 6810?

Facts

The applicant is engaged in importation of Bathroom and Kitchenware fitting and

Caesarstone Quartz. At the time of importation of Caesarstone Quartz, it is liable to pay

Basic Customs Duty and IGST and classified under heading 6810. For outward supply of

goods, it is liable to pay GST and there arises the question of whether it is to be classified

under heading 2506 or 6810.

Sr No

HSN Code

Description

IGST Rate

1.

2506

Quartz (other than natural sands) quartzite,

5%

whether or not roughly trimmed or merely cut by

sawing or otherwise in to blocks or slabs of a

rectangular (including square) shape

2.

6810

Articles of cement of concrete or of artificial stone

15%

whether or not reinforces

Applicant

Guiding Principles involved to settle the issue:

Stand

1.  Classification of good under Customs Tariff Act 1975 along with relevant chapter

notes of Chapter 25 and 68

product), crushed, ground, powdered, levigated, sifted, screened, concentrated by

flotation, magnetic separation or other mechanical or physical processes (except

crystallization), but not products that have been roasted, calcined, obtained by mixing or

subjected to processing beyond that mentioned in each heading.”

It is imperative to understand that the composition of Caesarstone contains 93% crushed

quartz. Quartz is combined with high-quality polyester resins and pigments and is then

compacted under intense vacuum and pressure into dense and non-porous slabs.

As per Chapter Note I to Chapter 68 which clearly provides that chapter does not cover

goods falling under Chapter 25.

As the manufacturing process is covered under the mechanical process and considering

Rule 2(a) and Rule 3(b) of General Rules for Interpretation and Chapter Note 1 to Chapter

25, Caesarstone imported shall be construed as a Quartz and classified under chapter 25.

Department

By considering the content of Chapter Note 1 to Chapter 25, the goods should not change

Stand

the character of mineral product. In addition to mechanical and physical process, chemical

process is also involved. Such process carried out is beyond the scope of Chapter Note 1 to

Chapter 25. Caesarstone is an engineered quartz surface and it is a man made stone or

artificial stone. Quartz is one of the raw material to produce Caesarstone and addition of

polymer resins and pigments to the quartz changes the character/structure of mineral

product.

AA also considereda ruling of Harmonised Tariff Schedule of United States in case of

Silestone TM wherein the slabs composed of 93% Quartz and 7% of resin binder, it is

classified under sub heading 6810.99.00 and considered as artificial stone.

Ruling with

Caesarstone imported by the applicant is to be classified under HSN code 6810

reasons

Discussion

On perusal of the Tariff headings of Chapter 25 and Chapter 68, it is clearly evident that a

Outcome

processed stone (artificial or natural) will be classifiable under chapter 68 while chapter

25 covers only natural stones in crude state. Accordingly, no contrary views have been

shared.