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of <h1>Court rules steel castings taxed at 4% not 8%, as not a metallic product.</h1> <h3>Mare Steel Castings (P) Limited Versus State of Kerala</h3> The court ruled in favor of the petitioner, determining that the steel castings should be taxed at the lower rate of four percent under the KGST Act ... - Issues:Assessment of steel castings under the category 'metallic products' at 8% vs. 4% tax rate under the KGST Act.Analysis:The court addressed the issue of whether the Tribunal was justified in confirming the assessment of steel castings under the category of 'metallic products' at the higher tax rate of eight percent under the First Schedule to the Kerala General Sales Tax Act, 1963. The petitioner contended that they were only a casting unit engaged in the manufacture of steel castings, which should be taxed at a lower rate of four percent under entry 2(ii)(h) of the Second Schedule to the KGST Act at the point of first sale in the State. During the hearing, the petitioner's counsel provided a copy of the product outside the steel casting to determine if there was a substantial addition after the casting work, making the product commercially different. The department failed to establish that the petitioner had made any significant improvements on the steel casting, and the assessment did not reveal any such enhancements. The court emphasized that for a product to be classified as a metallic product, there must be substantial modifications, including the addition of other metals. The court noted that the pattern of business remained consistent, and the assessing officer had previously accepted the petitioner's claim for a lower tax rate in a detailed order for a previous year.In light of the evidence presented, the court concluded that the product sold by the petitioner was solely steel casting and not a metallic product. Consequently, the court reversed the Tribunal's order and directed the assessment of the product under item No. 2(ii)(h) of the Second Schedule to the KGST Act, thereby subjecting it to the lower tax rate of four percent.
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